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The Wrong Reading List

Author: Richard N. Haass, President, Council on Foreign Relations
December 20, 2004


In any bookstore, you'll find business shelves stuffed with case studies, how-tos and inspirational tales about dancing with elephants and moving your cheese. But you will be hard-pressed to find even a few books on how to succeed in government or the nonprofit sector. This may not seem odd, until you consider that 7 million more Americans now work in the public sector than in manufacturing. Yet most people think business guides are enough. Indeed, this is a common refrain: we need to run the government like a business.

This would appear to have been the philosophy of the first term of

George W. Bush. The president has an M.B.A. from Harvard and worked in oil and baseball. Vice President Dick Cheney is the former head of Halliburton; Defense Secretary Donald Rumsfeld ran drug behemoth GD Searle. Former Treasury secretary Paul O'Neill was the top guy at Alcoa, and his successor, John Snow, ran transportation giant CSX. But it's not even clear that business is good training for business anymore.

The environment in which business people work is changing. Take Paul O'Neill. He never quite understood that he was no longer the ultimate boss or that speaking his mind was dangerous, especially when he spoke the truth about the dollar, Congress or Argentina. O'Neill was shown the door after less than two years in the job. Then there is Charlotte Beers, the advertising executive brought in to revive U.S. public diplomacy. Her attempts to improve America's image in the Arab and Muslim worlds through media spots depicting happy American Muslims fell flat. It is one thing to sell Uncle Ben's rice, another to sell Uncle Sam's foreign policy.

Why do so many people coming out of business run into trouble? In business, success can be measured by profits. How does one measure the quality of a public service, like law enforcement? By the number of arrests? Of accidents? There are other key differences. Few businesses enjoy a monopoly, but many nonprofits do. There is one city hall. Businesses are also free to go out of business, while government is not. Every remote post office or obsolete military base has its local champion, and so they stay.

Above all, business people tend to operate in a more structured, less complex environment. Former Bendix Corp. chief and Treasury secretary W. Michael Blumenthal says that in a company, "you can control the process and tell group-executive A, 'You're not involved, stay out of it.' And he will, and he must. In government, that's simply unworkable. So you have to learn to become one of a large number of players in a floating crap game, rather than the leader of a well-organized casino that you're in charge of." In his memoirs, former secretary of State George Shultz, a former corporate head at Bechtel, describes his experimental introduction of business practices into government. The consultant he brought in quickly flamed out, complaining that all his ideas were being overridden by the White House, leaked to the press or challenged by irate congressional staffers.

One person who lasted considerably longer is Colin Powell. He served in the military and on numerous corporate boards, and knew something about the differences between government and business. In government you need to find ways to motivate people without dollars. In early 2001, Powell shocked his assistant secretary by informing him at the morning staff meeting that neither of them would be briefing the president on his upcoming trip to Mexico. The most junior officers on the desk would be. Powell, who liked to find small ways to send big messages, wanted to communicate that you could do important and interesting things early on in a Foreign Service career. It wasn't long before morale, retention and recruitment all improved.

Government has other lessons to teach business. The common thread is this: what matters is not just the bottom line, but how it was arrived at. Process counts. The day of the all-powerful corporate manager is fast fading. Boards of directors, shareholders, the media, courts, workers and unions, regulatory agencies, activist attorneys general, consumer advocates, environmental and other citizens groups— all now exert growing sway. As a result, those in business would be wise to browse beyond the business books. Consulting the literature on politics, on history, may pay dividends. Those in business will succeed only if they come to appreciate that their world increasingly resembles the political arena that they so often ignore or disdain.

Richard Haass is president of the Council on Foreign Relations and author of "The Bureaucratic Entrepreneur: How to Be Effective in Any Unruly Organization."

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