Sunday, April 16, 2006

You Can't Run Government Like a Business -- But Bush Refuses to Believe It

Administration's Problems -- Iraq, Katrina, Dubai Ports Debacle -- May Stem From Bush's Corporate CEO Style of Governing

GUEST COMMENTARY
By Kenneth Walsh and Kim Clark
U.S. News & World Report

As he toured the seemingly endless rows of houses flattened by Hurricane Katrina in Gautier, Mississippi, something caught President Bush's eye. He leaned down and picked up from the debris what turned out to be a wedding photograph of a young couple and their family. "This is what it's all about," Bush told an aide. "So many emotions and history got lost here."

Yet Bush said the picture gave him a sense that, somehow, life would go on and things would eventually get back to normal. "You can't be president and always be down," Bush observed later.

That kind of optimism is part of Bush's character. It's also part of the larger code of the chief executive officer by which he governs. "He is an MBA president," says Carolyn Thompson, coauthor of The Leadership Genius of George W. Bush. "He is doing a bunch of things that he would do if he ran Chrysler or Joe's Pizza."

He sets the goals. He surrounds himself with loyalists. He delegates large amounts of responsibility. He is disciplined in working toward his objectives and in explaining them to the public.

Yet Bush's CEO presidency has fallen on hard times. Over the past year, he has endured two management disasters that undermined public faith in his competence: his administration's weak response to Hurricane Katrina, which erased his image as a strong leader, and its botched effort at persuading Congress to accept a deal authorizing a Dubai-owned company to operate six U.S. seaports.

In these cases, he seems to have delegated too much authority, lost track of what was happening, and failed to ask the right questions.

Former White House Chief of Staff Andrew Card, who resigned two weeks ago for what he said were "personal reasons," refused to "point fingers," but said Bush is correcting what went wrong and the administration will do better in the future.

The war with Iraq provides another example of how his CEO style has gone off track. After Bush decided to invade, he ordered Defense Secretary Donald Rumsfeld and the Pentagon to carry out the mission as they saw fit.

Critics -- including a growing number of retired military officers -- fault Bush for blindly following the recommendations of Rumsfeld and Vice President Dick Cheney and not sending enough troops to Iraq at the outset of the war, and then underestimating the strength of the anti-American insurgency.

"It's a classic problem of a CEO adopting a preconceived plan and failing to modify it to deal with reality," says a former White House adviser to Bush's father, George H. W. Bush.

"Staying the Course" Not Sitting Well With the Public

More than 60 percent of Americans now say the country is headed in the wrong direction, according to the latest NBC News/Wall Street Journal poll, and 58 percent disapprove of Bush's job performance. He has begun an aggressive PR campaign to boost support for the war, which is the biggest drag on his presidency, and is considering adding a veteran Washington insider to bolster his staff.

Despite the problems, Bush is hanging tough. "I have not seen a change in the president's leadership style and the management tools he uses," Card told U.S. News. Card and other Bush confidants say the chief executive is applying the hands-off style he learned at Harvard Business School, where he earned a master's degree in business administration in 1975, and also the methods that worked for him as an oilman, as managing partner of the Texas Rangers baseball team, and, later, as governor of Texas.

In his autobiography, A Charge to Keep, Bush defined his governing philosophy. "I put a lot of faith and trust in my staff," he wrote. "I look for people who are smart and loyal and who share my conservative philosophy. My job is to set the agenda ... and then delegate much of the process to them. The final decision often rests with me, but their judgment has a big influence."

He also admitted, "I am loyal to my friends, so it is sometimes hard to say no."

Putting Loyalty Ahead of Competence

Perhaps that's the problem. "Personal loyalty plays an enormous role in this administration," Rutgers political scientist Ross Baker told U.S. News. "One of the things a CEO has to do is make tough personnel decisions. He hasn't made any of them." Baker says Bush, more than most presidents, is "dependent on personal friends and confidants . ... It's almost tribal."

Bush isn't the first president to adopt the pyramidal CEO style. Dwight Eisenhower combined the chain-of-command system he learned as a career soldier with the hierarchies prized by business executives whom he respected. Ike has been derided for delegating too much power, but some historians, including Princeton's Fred Greenstein, say the unassuming Eisenhower was more involved in day-to-day operations than he let on in public. Greenstein called it the "hidden-hand presidency."

Ronald Reagan was also known for delegating and allowed a handful of powerful aides to manage his government for two terms. He had a more clearly defined conservative philosophy than Bush does, developed over years in public life, and it was thus relatively easy for his advisers to devise policy in keeping with the vision.

Reagan was also more adept at explaining his views to the country. But his hands-off approach produced the Iran-Contra arms-for-hostages scandal that almost destroyed his presidency -- a lesson in the perils of disengagement.

By contrast, Democratic presidents such as Jimmy Carter and Bill Clinton have tended to adopt a less hierarchical style of management. Since they believed in a larger government role in society, they tended to take more personal interest in the details of policy.

Bush Surrounds Himself With Only "Yes Men" and No "Doubting Thomases"

Each style carries with it potential pitfalls. "The problem with the CEO style of management," says a Republican who advises the White House, "is there has to be delegation, and it's easy to let it slip too far." Critics say the small group of senior aides who've been given lots of authority may be trying to do too much.

These officials -- the now-departed Card, counselor Dan Bartlett, Deputy Chief of Staff and political strategist Karl Rove, Deputy Chief of Staff Joe Hagin --"are also President Bush's personal assistants and spend a great deal of time tending to him ... so the management is weak," says the adviser.

Political scientist Baker says these aides seem to be "mind guards" -- his term for "yes men" -- for the president, rather than policymakers, administrators, or thinkers. And aside from his inner circle, Bush is said to be distant from the rest of his staff, jeopardizing morale.

Just as important, many members of Congress complain that they don't get their phone calls returned or their ideas considered in the West Wing. Bush, they say, doesn't reach out to them as other chief executives have done. He rarely invites them over for dinner, to watch a movie, or to attend a reception or party. These are small gestures, but such social interactions lubricate the governmental machinery.

In any case, Card argues that Bush consults privately with more non-government friends and civic leaders than outsiders realize. When fellow Republicans complain that Bush is aloof and that the White House staff needs to listen more, the president and his aides respond that things are just fine.

Bush Won't Face Voters Again, But Congressional GOPers Will -- And They're Not Happy

"They think raising money for Republican candidates is enough," says a prominent Bush ally who has recently turned critical of the West Wing. "Their attitude is, 'Quit your bitching. We raised $1 million for you.' They won't admit their mistakes or their problems."

This kind of hubris rankles even Bush's friends. But there was no course at Harvard Business School in how to make nice with Washington politicians, and no tradition in the Texas oilfields of swallowing one's pride.

[There is also the simple fact that Bush, barred by the Constitution from seeking a third term, doesn't have to face the voters again. But his fellow Republicans in Congress do -- and they're not happy campers at this point, with polls showing more and more Americans leaning in favor of the Democrats taking back control of Congress in this fall's midterm elections.]

Bush's Corporate CEO Style Leaves Too Few Accountable

Whether they love him or hate him, management gurus and business executives agree on one thing about Bush: His leadership style has been shaped by his 1975 Harvard MBA.

Bush's rigorous scheduling and message discipline, hands-off management style, and reliance on loyal longtime associates are all characteristics of business-schoolers. And many of the first MBA president's management techniques represent a welcome change from those of, for example, his punctuality-challenged predecessor, Bill Clinton, who was trained as an attorney.

But some business leaders worry that Bush may not be applying some of B-school's most important lessons and may be suffering instead from all-too-typical MBA flaws, such as overconfidence.

"He seems to pride himself on MBA characteristics, like delegating to his key people and saying he holds them accountable for results," says Roger Enrico, who does not have an MBA but served as CEO of PepsiCo in the late 1990s and is now chairman of DreamWorks Animation.

But Enrico, a big Republican contributor in 2000, says that the continuing worsening of the U.S. trade and budget deficits and the violence in Iraq have made him worry that Bush isn't holding his aides sufficiently accountable.

If his own subordinates delivered such disappointing results, Enrico says, he would do some firing: "It is time to change the team."

Bush White House Compared to Enron

Others say that while Bush is masterful at creating and selling his vision, he seems to struggle with execution. Jeffrey Sonnenfeld, founder of the Yale School of Management's Chief Executive Leadership Institute, says that when he taught at the Harvard Business School in the 1980s, 50 percent of every exam's grade was determined by the student's implementation plan.

Sonnenfeld, a Democrat, says he would give Bush "an F for contingency planning."

And Jeffrey Pfeffer, a Stanford University management professor, says the mistakes he sees Bush making "are extremely typical of those being made in corporate America." Pfeffer, also a Democrat, says Bush, who maintains an unwavering commitment to military action in Iraq, reminds him of other corporate leaders whose faith in their own abilities and theories blinded them to legitimate criticism.

"Look back at Enron," says Pfeffer of the energy trading company once led by Jeffrey Skilling, who received his Harvard MBA four years after Bush." They said the people who were criticizing them didn't understand" their complex accounting. Bush, he says, reminds him of business school graduates who too often try to "BS their way through" instead of "facing hard facts and continually trying to learn and adjust."

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Volume I, Number 21
Guest Commentary Copyright 2006, U.S. News & World Report, Inc.

"The 'Skeeter Bites Report" Copyright 2006, Skeeter Sanders. All rights reserved.


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