Government As A Business Concern

Over the weekend reports emerged that President Trump’s son-in-law, Jared Kushner had been tapped to lead a “government efficiency” commission. Kushner’s task was said to be about bringing business efficiency to government operations. Get the message, government is inefficient and businesses are efficient. Hmmm.

Governmental agencies are organizations which can be prone to bureaucracy and become tone deaf to the voice of the customer. Some business efficiency experts claim this tendency is part of the human condition and all organization must guard against inward focus. So what is so special about Kushner’s new assignment?

First, one must recognize that his assignment presumes two suppositions, (1) government agencies are inherently inefficient, and (2) business operations are inherently efficient.

One must remember, however, that government agencies are not “pop-up” operations which establish themselves around a perceived opportunity (customer demand). Government agencies are instead consequences of laws passed by Congress. Often Congress passes other laws which consequently set up other agencies creating confusion or conflict. And frequently, Congress does not pass new legislation when the original need has passed. In other words, some agencies simply outlive their original purpose and take on a new raison d’etre. So, in addition to efficiency, a useful question asks “do we need the agency at all”.

Choosing any particular business to model a government agency against has some key factors to consider.  Businesses mostly are about making a profit, the more the better. Businesses exist normally in a world of competition, both locally and globally. Businesses can hire and fire (for just cause). And, if a business fails, it can declare bankruptcy and simply go out of business. Hmmm.

So would one pick a Wall Street hedge fund as the model for improving the efficiency of air traffic controllers? Or select Google as the model for the Treasury Department? Or, Exxon for the State Department?

For sure there are business practices, like salary administration, performance measurement, and quality practices which have direct application to government agencies and should be considered.

Kushner’s task will be better understood when there is word on which Government agencies or work processes he is interested in improving.

Second, we must also recognize that many conservatives are primarily intent upon reducing the size of government. One way that could be imagined is to “bid” out government operations to the private sector. Compare, for example, Internal Revenue Service tax collection with offerings from outside vendors. Then, suggest that some company like “Turbo Tax” or “PwC” could do it less expensively (that is more efficiently). Eliminate the IRS and elevate a private sector, for profit company as the replacement. Hmmm.

There are huge obstacles awaiting Kushner. Government agencies represent employment and those jobs are often located in one party’s political district. This could be circumvented by requiring the new operating company to hire existing employees. Civil Service would most likely end for those impacted workers and hire/fire could begin with the oldest employees out the door first. You can complete the what could go wrong description.

Insidiously, one could speculate that new, private sector management could take over operations seamlessly and actually improved operations. What pressure do you think might fall upon the new operators top management from political operatives who sought further efficiency improvements or in lieu, political donations. Hmmm.

No doubt, there exists government agencies which could improve efficiency and others which do not need to exist. Kushner’s work could be beneficial or a Don Quixote like dream with consequences detrimental to current government employees and the US citizens who are the intended customers.

Let’s watch carefully.

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2 Comments on “Government As A Business Concern”

  1. Jane Jones Says:

    As Steven Colber pointed out, we the USA citizens are not customers, we own the government. It is there at our pleasure.


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