The Failure of the MBA Presidency

Bush's problem may not be his ability to run government like a business, but rather the notion that government should be run like a business at all.
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The New Republic's Clay Risen has an interesting piece on President Bush's lack of success as the first MBA president. "He ran on that brand -- and, in turn, that brand has haunted him repeatedly as a favorite trope for conservatives trying to explain why his popularity, and his agenda, have tanked."

In fact, a poll earlier this year found that just 40% felt the nation's "first CEO president" can manage the government effectively.

But as Risen concludes, Bush's problem may not be his ability to run government like a business, but rather the notion that government should be run like a business at all. This is a major theme in my book, You Won, Now What?, which examines the difficult transition many politicians face when moving from campaigning to governing.

While many voters seek the same efficiency they see in business for their their government, too many public officials actually believe they should run government like a business. Being efficient with public resources is an important goal, but ignoring the differences between government and business is an invitation to failure.

Here's what a newly-elected public official must understand:

Understand your bottom line: Business leaders and government officials are driven by different bottom lines. Private sector managers focus on profits, targeting their most promising customers and ignoring those unlikely to buy their product. Government leaders, however, must satisfy the broad range of voters who elected them.

Hedge your risks: Business leaders and public officials respond to risk differently. When a CEO takes a business risk, shareholders can judge if it worked and pull out their money if it didn't. In government, risk taking is rarely awared and citizens are stuck with the tab for any failures. While business leaders seek the large upside for bets that pay off, most public officials try to avoid the huge downside of those that fail.

Treat citizens as owners, not customers: Businesses learned long ago that treating customers well was a key to their success. But in government, the citizens are not just customers, they are also the owners of their government. Treating citizens as owners forces them to think more about the overall goals of government rather than the individual services they might receive.

Don't close the boardroom door: Business leaders typically make decisions quietly behind closed doors. With competitors always looking to steal market share, secrecy in business transactions is often essential. It allows companies to move swiftly and take advantage of changing markets. Government, however, must be open. Excessive secrecy actually undermines most public officials and causes them to lose public support.

More information on You Won, Now What? is available at the book's website or on Political Wire.

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