TEXT E Harry Truman didn’t think his
successor had the right training to be president. "Poor Ike---it won’t be a bit
like the Army," he said. "He’ll sit there all day saying ’do this, do that, ’
and nothing will happen." Truman was wrong about Ike. Dwight Eisenhower had led
a fractious alliance---you didn’t tell Winston Churchill what to do--in a
massive, chaotic war. He was used to politics. But Truman’s insight could well
be applied to another, even more venerated Washington figure: the CEO-turned
cabinet secretary. A 20-year bull market has convinced us all the CEOs are
geniuses, so watch with Astonishment the troubles of Donald Rumsfeld and Paul
O’Neill. Here are two highly regarded businessmen, obviously intelligent and
well-informed, foundering in their jobs. Actually, we shouldn’t be
surprised. Rumsfeld and O’Neill are not doing badly despite having been
successful CEOs but because of it. The record of senior businessmen in
government is one of almost unrelieved disappointment. In fact, with the
exception of Robert Rubin, it is difficult to think of a CEO who had a
successful career in government. Why is this Well, first the CEO has to
recognize that he is no longer the CEO. He is at best an adviser to the CEO, the
president. But even the president is not really the CEO. No one is. Power in a
corporation is concentrated and vertically structured. Power in Washington is
diffuse and horizontally spread out. The secretary might think he’s in charge of
his agency. But the chairman of the congressional committee funding that agency
feels the same. In his famous study "Presidential Power and the Modern
Presidents," Richard Neustadt explains how little power the president actually
has and concludes that the only lasting presidential power is "the power to
persuade." Take Rumsfeld’s attempt to transform the cold-war military into
one geared for the future. It’s innovative but deeply threatening to almost
everyone in Washington. The Defense Secretary did not try to sell it to the
Joint Chiefs of Staff, Congress, the budget office or the White House. As a
result, the idea is collapsing. Second, what power you have, you must use
carefully. For example, O’Neill’s position as Treasury Secretary is one with
little formal authority. Unlike Finance Ministers around the world, Treasury
does not control the budget. But it has symbolic power. The secretary is seen as
the chief economic spokesman for the administration and, if he plays it right,
the chief economic adviser for the president. O’Neill has been publicly
critical of the IMF’s bailout packages for developing countries while at the
same time approving such packages for Turkey, Argentina and Brazil. As a result,
he has gotten the worst of both worlds. The bailouts continue, but their effect
in holstering investor confidence is limited because the markets are rattled by
his skepticism. Perhaps the government doesn’t do bailouts well. But that
leads to a third rule: you can’t just quit. Jack Welch’s famous law for
re-engineering General Electric was to be first or second in any given product
category, or else get out of that business. But if the government isn’t doing a
particular job at peak level, it doesn’t always have the option of relieving
itself of that function. The Pentagon probably wastes a lot of money. But it
can’t get out of the national-security business. The key to former Treasury
secretary Rubin’s success may have been that he fully understood that business
and government are, in his words, "necessarily and properly very different.’ In
a recent speech he explained, "Business functions around one predominate
organizing principle, profitability…Government, on the other hand, deals with a
vast number of equally legitimate and often potentially competing
objectives---for example, energy production versus environmental protection, or
safety regulations versus productivity.” Rubin’s example shows that
talented people can do well in government if they are willing to treat it as its
own separate, serious endeavour. But having been bathed in a culture of
adoration and flattery, it’s difficult for a CEO to believe he needs to listen
and learn, particularly from those despised and poorly paid specimens,
politicians, bureaucrats and the media. And even if he knows it intellectually,
he just can’t live with it. For a CEO to be successful in government, he has to______.
A.regard the president as the CEO B.take absolute control of his department C.exercise more power than the congressional committee D.become acquainted with its power structure