Business and Government

There’s a prevailing difference of opinion over whether
government should be run as a business or whether our governments’
missions are too unique. Can governments be better served by the
same for-profit strategies and competitive tactics found in the
open marketplace and corporate headquarters?
As always, there’s probably truths to be found on both sides of
the argument. The debate is being intensified because of the
prolonged national economic downturn that is forcing all sizes of
governments to look deep into their shrinking public purses.
The pending California governor’s race between Republican Meg
Whitman and Democrat Jerry Brown is likely to focus on this
question as well. Whitman is touting her CEO resumé at eBay and
wants to strip-out the waste in California’s government and bring a
“no nonsense” corporate structure to Sacramento. Jerry Brown is a
career politician who probably has never turned a profit in his
life.
In these tough times smart for-profit businesses have stopped
doing “business as usual.” Instead, they’ve quit unnecessary
expenses and delayed some expansion plans. They are re-visiting
their “core values” and have studied changing marketplaces and
customer demands. Many businesses have had to shrink, some
permanently. Thousands of jobs in some industries may be lost
forever, even as economic times slowly get better.
Last week, Moody’s economist Steve Cochrane delivered his annual
economic update to over 200 Sonoma County business and government
leaders. He predicted a “slow and pretty bumpy recovery” for both
local businesses and local governments.
Local unemployment will stay above the national average, home
values may improve “slightly,” tourism and wine sales should be
“favorable” again, Cochrane reported in his study for the county’s
Economic Development Board. But local mortgage delinquencies will
remain among the highest in the state and nation and overall
economic growth will be lucky to top three percent, he added.
When sales and orders get low, businesses can switch to lower
prices or offer different products. Businesses can make special
deals like 2-for-1 dinners, extended warranties or new
“freebies.”
Governments can’t utilize the same tactics or promotions as
corporations. Driving a business to profit is very different from
leading a government to efficiency. True, some leadership skills
can serve in both “for-profit” business and “good-for-all”
government. And, maybe it’s time to quit doing “government as
usual.”
Sonoma County’s government is facing a $61.2 million budget
deficit. Administrator Veronica Ferguson is proposing the
elimination of 95 county government worker jobs and leaving 165
other positions unfilled. “We are facing a fundamental realignment
of county government,” the first-year administrator told the
five-member board of supervisors this week.
Faced with such a severe fiscal challenge, any for-profit
business could just quit offering certain services or products
until the economy gets better. Governments can’t do that. While
they have to be “efficient” they are expected to protect our social
safety net and provide services to veterans, adult protective
services and children’s welfare, among many other non-profitable
pursuits. The jail, the roads and the sheriff’s department have to
stay open — almost at any cost.
In the business world, you measure success by how much money you
make. In the world of government, success is not about money; it’s
about services, safety and support. The only money governments make
is what they collect from successful businesses and taxpayers.
We’ve been asking our governments to do more while we give them
less for too many months now. Even after the economy begins to
improve and some of us get our jobs back and our paychecks start to
grow again, it may not be enough.
Our local governments are facing a pending fiscal crisis,
stymied by a $20 billion state deficit.
If governments were truly like a business, you’d probably be
able to buy a few cheap ones on eBay right now.
— Rollie Atkinson