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Government Why it cannot operate like a business Why it cannot operate like a business

Posted: September 6, 2013

We need to talk about government. You might like it or hate it. You might do business with it. Your company certainly pays taxes for it. But you don't understand it. You think, "It just doesn't make sense that government cannot operate like my business."

If I were writing a "Business Guide to Government," the first page would state: Government cannot act like a business, nor do you really want it to.

Let me explain.

A common maxim in my area of management goes like this: Government and business are alike in all the unimportant ways. While both value professional management skills and practices, the weight given to such things differs because of fundamental differences in goals and environment.

In business, profit is king or else you go out of business. With government at all levels, large or small, goals are more complex. Productivity, as measured by effectiveness and efficiency indicators, comes closest to government having a "profit" motive.

Yet, there are two other goals, beyond government's control, that we often value much more than the goal of productivity. They are:

Equity. You and I probably do not live in a high-crime area, but we still insist that the police patrol our neighborhoods. Time and resources used in patrolling my safe street means less effectiveness in patrolling crime-ridden blocks.

You and I live in the Hampton Roads region, but we want to pay no more for first class postage when we send a letter to Barrow, Alaska, than what we pay when it is sent just down the street. Given the high cost of jet fuel and diesel for semi-trucks, it must be the greatest bargain to send a transcontinental letter and the biggest rip-off to pay the same 44 cents for local postage. Or, perhaps it's just the reverse. Which is the bargain and which is the rip-off? It doesn't matter because equity trumps productivity.

Consideration. Now, please don't laugh. I'm not saying business is never polite or government is always empathetic. (I've been to the DMV.) But expectations about consideration differ depending on whether one walks into a business establishment or a government building.

Typically reflected in the form of a receipt, the former offers a contractual relationship with limited expectations.

While valued and essential to profit, customers are neither bosses nor stockholders. You don't have to listen about their ideas on how to rearrange your business. The receipt limits the expectation for consideration.

Imagine if every customer assumed he was a boss or stockholder? What level of consideration would they expect? How much consideration would your clerks give the "big shots" visiting the store? Those big shots could really get demanding, couldn't they? They might insist on rearranging everything.

This is the relationship between citizens and government. Rather than contractual, it is constitutional, which makes each citizen a big shot. Citizens expect to be treated as such. If consideration is not to their satisfaction, they may write letters or protest inside your building. These big shots may even insist on being in the room when decisions are made.

I once facilitated a retreat for a Michigan city government. The city manager and council members were to hammer out sensitive issues concerning budget priorities for the coming year. How much funding should go to police vs. parks, fire vs. schools?

Because citizens are the boss, carrying that constitution, the two-day retreat was covered live by a radio station. Can you imagine discussing priority options in your business while customers and competitors are listening in? Would this not affect the exchange of ideas concerning everything from product development to plant relocation?

Fact is, those holding a constitution, the big shots, have a right to listen and participate; and this is just another reason why productivity often takes a backseat to other goals when it comes to government.

Government certainly bears fault when it fails. But studies show its performance at all levels is far superior in the U.S. than in any other country. Government simply cannot run like a business.

You do not want it business-like because your need for equity and consideration usually outweigh your concern about its productivity.

Come to think of it, that "Business Guide to Government" probably only needs that one single page.

James D. Slack, Ph.D., is a professor and director of the Master of Public Administration Program in the Robertson School of Government at Regent University. He can be reached at jslack@regent.edu.

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