Tuesday, June 02, 2009

The Infestation of Government Values In Industry.

June 2, 2009

Re: The Infestation of Government Values In Industry.

On Monday, May 18th, David Brooks had a column in the Times that seems to have attracted a lot of attention: three days later, on Thursday, May 21st, the Times ran no less than seven letters addressing Brooks’ points. Curiously -- one wonders if it’s pure coincidence, pure serendipity arising from events in the world around us -- two days after Brooks’ column, and one day before publication of the responding letters, the Wall Street Journal ran an op ed piece by John Steele Gordon on the same ultimate subject as Brooks’ column -- not entirely the same subject, but the same ultimate subject.

Discussing successful executive leadership in business, Brooks said that the research and writing shows that what is needed is not warmth, empathy, extroversion, agreeableness, team orientation, flexibility or other such aspects of what one might call our feel good culture. What is needed, rather, is attention to detail, analytical thoroughness, efficiency, persistence, relentlessness -- even unidimensionalness -- willingness to work long hours.

What is needed for topnotch executive leadership in business, said Brooks, is very different from what is needed in politics. Political leaders, he said, need “charisma, charm, [inter]personal skills.” In his own piece two days later, Gordon elaborated this by saying the politician’s job one is to get reelected (forever), which causes him/her to have a short term bias at the expense of foreseeably bad long term consequences, to favor “parochial interests over sound economic sense” (amen to that, brother), and to do things to get headlines “even when doing nothing would be the better option.”

In his very last paragraph, Brooks made clear where he was going -- made clear what the entire rest of his column was prelude to (which was also what Gordon’s entire piece unabashedly was all about from sentence one). Now that the government is in effect taking over major industries -- is “freely interposing itself in the management culture of industry after industry,” said Brooks -- “CEO’s are forced to adopt the traits of politicians. That is the insidious way that other nations have lost their competitive edge.” In short, corporate leaders will have to be smiling, charming, political glad handers, agreeable extroverted types, empathetic charismatic types who feel [y]our pain as Billy Bum used to say, instead of persons who live by diligence, analytic thoroughness, persistence, relentless pursuit of a goal, and horridly long hours of work.

Gordon is of the same view -- only more so -- regarding what will happen because of government’s intercession into management. His column is dedicated to the idea that government always and inevitably messes up when it tries to run businesses. To reasons that were mentioned above, he adds some others. To me, his most important addition is that government, unlike corporations, is always using other peoples’ money (the taxpayers’), rather than its own, regards cost cutting as alien, rarely faces competition, and is designed to be, and is, inefficient rather than being run efficiently, as he says businesses are by benevolent despots.

Of course, in opining (correctly, I think) of the dangers of government-run businesses, dangers arising from government value systems inappropriate to business and incompatible with values that they believe propel business, both Brooks and Gordon overlook the salient fact of present economic life. We are living through a disaster caused mainly by private businesses and their values. We are living through a disaster mainly caused by Wall Street and its value of uncabined greed, by the mortgage companies and banks, and by businesses like GM. True, government functionaries like Robert Rubin, Lawrence Summers and Alan Greenspan participated in causing the disaster, but Rubin and Greenspan were in reality from business (and, in Greenspan’s case, from the insane nation of Ayn Randism) and Summers might as well have been from Wall Street given who he apparently buddied around with and who he later joined. To say that danger lies in importing governmental values into business (as it does), while ignoring the disaster caused (and, in capitalist history, regularly caused) by the values of business, strikes me as more than a little ridiculous.

It was said earlier that seven responses to Brook’s piece were printed by the Times on May 21st. As often the case, the letters were sometimes pretty good. A couple of them said that the current Administration, as opposed to Brooks’ claims about government, had a number of level headed, methodical types, and that it was a business type -- the lifelong serial failure, “splashy product rollouts” type (remember “Mission Accomplished”?) -- who was responsible for the disasters we are in. (One should add other business types such as Greenspan and the 1990s business leaders Cheney and Rumsfeld.) It was also pointed out in the letters that vision, charisma and motivational ability can be combined with nuts and bolts competence, and that the greed so recently on display year after year in business had led to environmental disaster and rocketing costs of health care. The ideas in the letters were useful counterpoints to Brooks -- and to Gordon.

Now let me tell you what I think, as in part has already been done. My views come not just from reading, but from the extensive experience of myself and several other people in starting, running and expanding a law school -- a job at which some of us now have 21 years of experience.

It is absolutely true that the key to creating or running a private institution -- any kind of private institution, be it a business, a school, or what have you -- is, as Brooks says is characteristic of successful executives, unremitting attention to detail, thoroughgoing analysis, obsessive diligence, unending persistence and a thoroughgoing, never ending dedication to getting the job done -- the kind of dedication that causes one to create a to-do list with scores of items and, when they are accomplished, to already have in place a new to-do list of similar length. Nor does it hurt to have a high level of motivation and of motivational ability. Many of my colleagues who participated in starting the school possessed all these traits, and several of them are still with us and still exercising those traits.

One thing that strikes me as puzzling is that there are people who have a high order of ability to get things done -- the most essential quality in administration -- yet do not have a high regard for this ability which they possess. It’s as if the gift, because it comes from nature, not from endless “practice,” is therefore not thought a worthy one. This disregard for nature’s gift is a great mistake. I have often thought that the ability to get things done, which in an institution is, as I say, an essential one, is also the rarest one. People who have it but don’t think well of it or don’t use it are doing themselves an injustice.

It is also my judgment, after decades of dealing with academic and political bodies, that getting the job done is not high in the pecking order of values for these bodies. What generally matters most to them is talk. Talk, talk and more talk. Brooks is right when he says that “people in the literary, academic and media worlds rarely understand business. It is nearly impossible to think of a novel that accurately portrays business success. That’s because the virtues that writers tend to admire -- those involving self-expression and self-exploration -- are not the ones that lead to corporate excellence.”

In the academic, governmental and media worlds, continuous, undammed expression reigns supreme, and in the media world, the pundit world, one can, as we know, be continuously wrong, yet suffer no penalty. Lots of columnists and commentators owe their livings to this fact.

Yes, there are times in politics when a legislator or official is hell bent to get something done, but this usually occurs only when a major campaign donor insists on some bill or action. This hardly qualifies as an overall ethos of “get the job done.” It is only a bending to the powerful in order to accomplish job one -- the never ending job of seeking reelection after reelection after reelection.

Nor, looked at from the other side of the ledger, do I think that most CEO’s can be quite as despotic (even if benevolent) as Gordon indicates. The days of Harold Geneen are past. Largely ditto for Chainsaw Al. Despots who do as they wish regardless of the wishes of employees and Boards of Directors are likely these days to rather quickly find themselves ruling not over France, but only over Elba.

Yet, for all this, I do think that, from the ubiquitous earmarks that Congress now awards each year by the hundreds or thousands to private parties, to the potential running of major businesses, it will be very bad for the country if the values of politics increasingly infest the private sphere, as they already have to a significant extent and as will become more pronounced if government doesn’t rapidly get out of the business of business. Obama vigorously claims that government will not try to run businesses, and that it will get out as quickly as it can, but the media is filled today with reasons why this may not happen, and the truth is that when government gets involved with owning businesses, it often stays deeply involved for a long time, especially because so much money can be at stake, and gets involved in business decisionmaking. This would probably be very bad if now replicated in the next five to ten or twenty years. We do not need smiley-faced glad handers, those who go along to get along, the charismatic, non-working, lazy, personality boy, political types running huge businesses. We need the analytical, the workaholic, the detail oriented, the relentlessly goal oriented, the person who can combine these traits with fairness to employees and the public. You know, it is already the case that government is bought and sold by wealthy donors and by those who can deliver votes. This conduces not to competence and usually not to fairness, but instead, generally, to the rich getting richer, to favoritism to the nth degree, and to ordinary people getting left out. We don’t need more of this in politics -- we have way too much of it there already -- and we don’t need any of the values these traits represent in business.*

*This posting represents the personal views of Lawrence R. Velvel. If you wish to comment on the post, on the general topic of the post, or on the comments of others, you can, if you wish, post your comment on my website, VelvelOnNationalAffairs.com. All comments, of course, represent the views of their writers, not the views of Lawrence R. Velvel or of the Massachusetts School of Law. If you wish your comment to remain private, you can email me at Velvel@VelvelOnNationalAffairs.com.

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