thebigp

Our founding fathers showed genuine genius in some of the things they created. Collectively, they envisioned a political system with both flexibility and resilience, and we enjoy so many benefits as a result of their political and practical foresight.
Though brilliant, they missed one interesting aspect of life today. In all their foresight, they never envisioned — couldn’t envision — more than 2 million federal government workers. By any account, government today has grown into a big business. I’ve served on dozens of nonprofit boards and currently advise both corporate and governmental clients. I find that lessons I learned in business school often help with the challenges they face.
Though big government isn’t a traditional business, that doesn’t mean it shouldn’t run like one. In fact, management tools that typically turn profits on Main Street can be readily applied to accomplish government goals.
My wife worked in some local school districts, and I was sometimes stunned by the stories she shared. Some of the district leaders seemed to have missed basic management 101. It was apparent in the way they treated staff and communicated among themselves.
When a business negotiates a better contract for office supplies, for example, the amount saved is typically used to boost profits or buy better factory equipment. Likewise, savings in federal office supplies could serve more people in need, reduce government spending (and taxing) or even boost pay for deserving workers. Instead, government agencies often rush to spend money before each budget year ends. Whether that accelerated spending is wasteful or thoughtful is often debated.
In business, the pursuit of profit is really a quest for efficiency. Good managers seek the best use of resources and strike a delicate balance of labor, money, knowledge and materials. The right business mix results in profits for shareholders. The wrong mix results in losses or bankruptcy. An ongoing profit motive drives continual adjustments to the mix.
Profits provide an easy measure for this continuous shuffling of resources. The mix is right when profits are high. The mix is wrong when they aren’t. Professional managers have an arsenal of tools to measure, analyze, design and implement business plans.
Government agencies should also seek continuous adjustments to the resource mix. Instead, in my experience many agencies hold on to sluggish programs too long and hesitate to change benefits or practices. But citizens change all the time. Technology gets better. Our knowledge base grows. Employees gain experience. Children grow up. Tax revenues rise and fall. The right mix of labor, money, knowledge and materials isn’t the same today as it was ten years ago.
Similarly, good government programs today likely aren’t the same as 10 years back. Remember when all Social Security checks were mailed at the beginning of each month? Today, they are deposited to bank accounts directly, which avoids delivery problems. Many highway and bridge tolls are now billed electronically, and debit cards have replaced stamps or cash for many aid programs.
In business, aging products and services are improved or removed. They are replaced by something better, or if fewer people are buying them, they might be eliminated completely. Again, the quest for profits means that competitors will offer a better product if you don’t.
If profits aren’t the right measure for government, what is? Well, that varies from program to program, but a meaningful measure is always there. If the goal is to feed the hungry, is that being done? How many people? Is the food nutritious? How much labor, money, knowledge and materials are being used to meet that goal? Sadly, I sense that many government programs are judged more on good intentions than good results. But results matter — and good business is about getting good results.
More importantly, could more people be impacted with a different mix of resources? Could better technology or better contracts lead to better outcomes? These are common business challenges, and there are credible tools to address them. Business schools throughout the country teach the principles. Good management is accepted science, and the principles are universal. Simply choose the right goals, and continually measure the outcomes. Adjust as necessary. Repeat.
Everything from poverty programs to healthcare to public education could benefit from decent business applications. Yes, there are already government programs in place today. Yes, they are staffed with experts with specific technical and sector knowledge. Yes, some of those programs have served the public well in the past.
But that simply isn’t good enough. Could more be done with a different mix of resources? Could we spend less money by beefing up technology or staff training? Could contracts be renegotiated? Could a different management team get better results with the same resources? Government isn’t a business, but that doesn’t mean it shouldn’t run like one.
Our founding fathers created a wondrous political framework. But the business of government could still use some work.
Source-Kansas City Business Journal Leadership Trust
By Dan Danford , Founder/CEO at Family Investment Center
Dan Danford, CFP® is Founder/CEO at Family Investment Center.