Monday, January 30, 2012

Dump the CEO/President rhetoric

It’s time to raise a finger of warning regarding the prolific use of the "CEO President" analogy in the current primary rhetoric. The role of President of the United States may have some things in common with the role of CEO of a large corporation but then again the office of President has things in common with many different roles. The USA is not a corporation and the President is not the CEO.

There is nothing fundamentally wrong with making comparisons between different roles in society to learn from similarities as well as the differences. The problem is that we often take these kinds of analogies much too far. Listening to the political rhetoric around the presidential primaries I get the uneasy feeling that many people, including some presidential candidates, actually think running the country is the same as running a company. Again, although there are clearly some similarities, the differences are so significant and so many that we should be wary of even using this analogy.

Corporations are generally not democracies. CEOs, even the best ones, are accustomed to having orders executed. As long as the CEO enjoys the support of the board he/she expects action. Good CEOs may tolerate a great deal of open hearted and even heated discussion until a decision is made but after the decision is made the CEO expects loyalty to the decision and action towards executing the decision. Opposition and competition for a corporation are by definition confined to the competition, i.e. to other companies providing similar goods and services not people within the organization.

The President of the USA does not have the consolidated power of a CEO and cannot expect to have his/her orders followed after a decision is made. The decision making process is long and complicated and usually involves so much bargaining with opposition that the final result hardly resembles the original idea. When some sort of decision is finally pushed through Congress it is still free for any and all opposition to work actively against the decision. What CEO would tolerate that kind of behavior within their own organization?

Shareholders, employees, customers and suppliers are distinctly different roles and for the most part completely different people. In government there are no investors who expect a certain return on investment. The closest role to a citizen that can be found in a corporation would be that of customer. The concept of customer may be useful in terms of government providing various services to citizens which the citizens pay for through taxes. But again, there is not a direct correlation between the recipient of the service and the payer for the service. Typically real customers have a choice but in most areas government has a monopoly on the services provided. Certainly citizens have choice in terms of voicing opinions and electing politicians to make wanted changes but this is a long slow process.

If we insist on using corporate language to describe government the best we could do is to call government a kind of "Shared Service" organization. We as taxpayers decide that certain services would be better if we share. We pool resources in order to provide those services to us. In developed democracies like the USA most political debate is focused on "how much" service should be provided not on what services. There is no real debate about wether we should provide education, healthcare, a legal system, military or welfare. The debate is more focused on how far reaching these services should be and how they should be financed.

There are employees and clearly much of the leadership skills required for leading a large company will be useful in leading these employees but corporations do not have a monopoly on good leadership. Good leaders may have honed their skills in NGOs, military, medicine, education or any number of other places.

There are opportunities to learn from corporations about efficiency in processes and good customer service but then again corporations may well have opportunities to learn from other areas in society as well.

Our founding fathers intentionally created a system of checks and balances to guarantee that too much power didn’t end up in the hands of one person or one group. CEOs are dictators. Companies are dictatorships. We have seen examples of leaders of some countries trying to implement a CEO-like leadership (ie Italy, Hungary, etc) and the end results are devastating to the democratic process.

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