CEOs in Government

Can the Donald Trumps of the world translate their private-sector successes to the public sector?
by | April 18, 2011

In an era of diminished expectations, the allure of "can do" leadership is strong. Enter Donald Trump, businessman extraordinaire, promising to set things straight and clean up government's mess.

He has done this before.

In 1980, New York City closed down the Wollman Skating Rink in Central Park for a planned two-and-a-half year renovation. Six years later, the project was bogged down in red tape and still years away from completion.

Annoyed by the lack of progress, Trump wrote a letter to then-Mayor Ed Koch: "I have watched with amazement as New York City repeatedly failed on its promises to complete and open the Wollman Skating Rink. Building the rink, which essentially involves the pouring of a concrete slab over coolant pipes, should take no more than four months' time." Trump went on to offer to finish the job at his own expense, promising to have it completed by year's end.

Koch was initially reluctant, but yielded to pressure from the media and turned the project over to Trump. The rink was completed under budget in less than four months, and New Yorkers were happily skating by Thanksgiving.

The contrast couldn't have been sharper. The can-do capitalist Donald Trump had embarrassed Koch and his bureaucrats. It was Trump who delivered the ice.

Yet Koch dismissed his success, "We have many legal constraints on us not applicable to the private sector that often make it difficult to do things as efficiently as we would like to," he told Time magazine.

Is Koch right? Is government a tougher place to successfully execute big undertakings?

While leadership ability (or lack thereof) certainly plays a role, there is no question that the operating environment of government presents extraordinary managerial challenges. Anyone who thinks that Trump's success in business guarantees success in government ignores the history of business executives who have flamed out in the public sector.

Take Craig Benson, a high-tech entrepreneur, who was elected governor of New Hampshire in 2002 by promising to run the state like a multibillion dollar corporation. He was fond of holding meetings standing up to keep them short. After two frustrating and ineffective years, Benson became the first granite state governor in 78 years to fail in his first reelection bid.

The latest business person to flame out in government is Cathleen Black, a successful publishing executive who lasted only three disastrous months as Chancellor of the New York City public schools.

New York City Mayor Michael Bloomberg had called her a "superstar manager," and a group of New York CEO's called Partnership for New York had also backed Bloomberg's choice, noting: "You would be hard-pressed to find a more qualified and more capable candidate than Cathie Black."

Yet Black had no familiarity with the arcane rules and Byzantine budgeting of public education. As she put it, "It was like having to learn Russian in a weekend -- and then give speeches in Russian and speak Russian in budget committee and City Council meetings."

Business experience, however, isn't necessarily a bad thing for a public leader. Some have successfully made the transition from success in business to success in government. Take Mitt Romney, Richard Riordan and Michael Bloomberg, for example. But even while overseeing well-regarded administrations, none achieved the sort of outsized successes they had racked up as business entrepreneurs.

Maybe Koch was right. Maybe the key difference between success in the private sector and public sector is the constraints. Is it fair to expect government to match the private sector?

Business can be tough. But few business leaders have to deal with the glare of media spotlight, navigate the minefield of special interest groups or operate under the constraints of multiple collective bargaining agreements. When Trump wanted to hire a contractor to pour concrete, he could hire anyone he wanted in a matter of hours. Public procurement, on the other hand, demands an open and transparent process -- and that takes time.

Those who yield readily to all these bureaucratic rules find they can accomplish little -- and skating rinks go unbuilt for years. Those who adopt a bold, take no prisoners approach may find themselves pilloried in the press and voted out of office -- as Mayor Fenty and School Chancelor Michelle Rhee learned in Washington, D.C.

Those who expect the nimble efficiency of the best of the private sector from government will generally find themselves disappointed. We need to recognize that the checks and balances of our democratic system aren't designed for efficiency. Even the best political leaders will have to deliver results in an environment of constraints that no business has to operate under. And while a can-do business leader might be able to blow down doors when it comes to building a skating rink, improving a public school bureaucracy is a much more difficult challenge.

Should we despair at the unfairness of it all? Not at all. The goal is good government, not perfect government. Rather than looking to a business savior to make it all right, we all need to explore ways to deliver public value in as efficient manner as possible -- including thoughtful partnerships with the private sector.

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