Romney makes much of his business credentials when asking for our vote. In doing so, he is following the well established game plan of other business leaders seeking to be elected. This is because of an accepted truth that a successful manager will also govern successfully.
I’d like to double click on that.
A business sells a product or a service. Managing a business involves dealing with three key constituents:
– Customers: buy the product or service
– Employees: build the product or deliver the service
– Investors: fund the business and gain/lose with its fortunes
Managers are appointed by only one of the constituents – investors. Therefore, successfully managing a business only requires managers to make their investors happy. This gives managers a clear mandate and simplifies decision making.
Now let us switch to the government and examine the situation there.
A government offers services. Governing involves dealing with three key constituents:
– Users: use government services
– Employees: deliver government services
– Payers: pay for government services
Governors are appointed by all three constituents. Users, employees and payers are all involved either directly or indirectly. Direct involvement comes through voting and indirect involvement comes through influencing the voting via ads or other means. Therefore, successful governing requires making all three constituents happy. This gives governors a very fuzzy mandate and complicates decision making.
Clearly, managing a business and governing are very different beasts.
In fact, I’d go as far as to say that successful managers make lousy governors. Here is why.
Successful managers tend to approach governing with a highly positive bias towards payers and a highly negative bias towards users and employees. Based on their own experience, successful managers feel payers are unfairly overburdened and therefore focus all their attention on minimizing the bill for payers. Also, the typical hubris in successful managers makes them take a dim view of users, creating a consequent focus on minimizing services for users. From the perspective of employees, successful managers tend to push pay-for-performance and outsourcing philosophies that don’t sit well and create new problems.
You can see this in play with Romney’s desire to cut taxes for the wealthy (big payers), his now famous quote on the “47% not paying taxes” (big users), his talk about reducing the influence of unions (pay-for-performance) and his ideas for privatizing services like medicare (outsourcing).
So the next time someone touts their business creds and wants your vote, just remember that government is tricky business!