The Business of Government is NOT to Run as a Business

We’ve all bemoaned the inefficiency of government in some way or another, probably the most common: complaining about long lines at the DMV, although I feel compelled to say that the last two times I went to the DMV it was an efficient, well run process.  However, the notion that as Jared Kushner said to the Washington Post, “the government should be run like a great American company. And our hope is that we can achieve successes and efficiencies for our customers, who are the citizens,” is misguided and hopeful at best and ridiculous and ominous at worst. The Government is not a business, and should not be run as one.

That’s not to say government agencies couldn’t benefit from the efficiencies found through technology or purpose-driven budgets unhampered by congressional mandate – of course they could. Applying good business practices is not the same as running the government as a business. Frankly more businesses should apply good business practices too.

Applying good business practices is not the same as running the government as a business – Lee Caraher

Citizens Aren’t Customers

First, American citizens aren’t our government’s customers. Actually, citizens are the government’s employers. And we see the impact of the “employers” who make their wishes known through calls, activism, etc. The NRA didn’t get where it is because of a majority point of view; it got where it is because a small minority of its members call their legislators often to express their desire – they’ve given direction to the people they put there. In recent months, we’ve seen the impact of “employers” calling to express opposition to the AHCA and Betsy DeVos.

Second, the role of business and the role of government are not equivalent or equal.

American business in a market-driven economy runs on the premise of choice – fight for customers based on their ability to choose the best option for themselves as defined by value, features, benefits, price, company ethics, personal values etc. Competition is meant to drive options to meet many needs. Well-run companies continually strive to capture more of the right audiences that drive their business model to the net-positive.  If there was a different option to get a license, I imagine that the experience would improve even more than it has in the last few years.

American business need not serve those who can’t afford their services. The services and responsibilities of the government are meant for all, and as such don’t offer choice. American government exists to serve all its employers. Private business has yet to prove that it can solve big, societal issues including things like the impact of climate change: profit is too far off, and too many different organizations and businesses need to cooperate to ensure collaboration. Thinking that government should be run as a business is antithetical to the requirement of business which operates within a customer choice economy – decisions are made to influence customers’ choices. Without choice in the market, businesses would operate differently.

Business is not a Democracy

Importantly, American businesses are not democracies. As I’ve described before, the best businesses are run by leaders who operate with a high input, low democracy framework. High input, to solicit ideas, points of view, information that helps inform a decision. Low democracy, in that, while high agreement is a good and efficient thing in business, decision making cannot wait for a vote.

High input is American business is becoming even more important in today’s political climate. In the never-ending quest to recruit and retain great people, companies and their leaders who consider their employees’ wishes in their decisions and discuss decisions transparently will ultimately win the war for business-driving talent.

High Input, Low Democracy Keeps Talent

Uber is the most visible example of this today. CEO Travis Kalanick, reportedly resigned from President Trump’s economic advisory council because of increasing pressure from important employees unhappy with their CEO’s willingness to support the new President after the first executive order on immigration.

On the other hand, based on the mounting evidence of Uber’s treatment of women and failure to rectify blatant sexism in the workplace, I decided that Double Forte would no longer reimburse employees for Uber rides. While I socialized the idea among the key leaders in the company and got their input and ideas on how to implement the decision, I was not sway-able on the topic; it was a low democracy decision, helped by high input on implementation. The feedback from staff has been overwhelmingly positive – of course, that doesn’t mean that some people didn’t disagree.

Yet, just as some Uber employees will probably stay at the company because their CEO left the President’s council, I bet some of my employees will stay at Double Forte because of the principles that guided me to make my no reimbursing for Uber decision.

I could go on.

The idea that we should run our government as a business is not a new one. Better to focus on applying good business practices to help solve the problems  As Jeff Spross of The Week noted in his story America’s Government Can’t Be Run Like A Business. That’s A Feature Not A Bug, every president in recent history has talked about this in some way. However, while the government obviously has problems, “the lack of private-market magic in its own operations isn’t really one of them.”