As the environmental disaster in the Gulf continues, the pundits have begun to focus on President Obama's management style and his lack of management experience. On Sunday, Glenn Thrush and Carol E. Lee focused on the issue of management in their incisive Politico piece, "Oil Spill Tests Obama's Management Style." Thrush and Lee observe that:
"The Gulf crisis has shed light on the strengths and weaknesses of Obama's unique management style, which relies on a combination of his own intellect, a small circle of trusted advisers and a larger group of outside experts. But it's also driven home a more generic lesson all presidents learn sooner or later: Administrations are defined, fairly or not, by their capacity to control stagnant backwater agencies, in Obama's case the Minerals Management Service, which failed to detect problems with the Deepwater Horizon well."
This, of course, is true, but this piece and others like it focus on the President and his approach to management and fail to discuss the far more critical issue of the now three decade long attack on federal government organizational capacity. Ronald Reagan began the process of deconstructing the federal government's capacity. This effort to "starve the beast" and destroy federal capacity was reversed during the Clinton era as Vice President Gore led a well intentioned effort to reinvent government, but the forces of disintegration picked up renewed momentum during the Bush years of 2001-2009. During the Presidency of Bush the latter, federal agencies that needed to build capacity for a new task were required to demonstrate that the capacity could not be found and purchased in the private sector. The underlying assumption of federal management during the Bush Presidency was that government was the enemy and the private sector was the great repository of management competence in America.
BP and the Gulf oil spill, Enron, the Wall Street meltdown and the collapse of the American auto industry provide ample evidence that the private sector does not have a monopoly on management competence. Let's take a closer look at private sector management. According to the American Bankruptcy Institute (reported in the Kansas City Business Journal on August 25, 2009), "more than 30,000 businesses filed for bankruptcy protection in the first half of 2009, up 64 percent from the nearly 18,500 in the same period last year". It is true that not all bankruptcies are caused by incompetence, and not all incompetence leads to bankruptcy. But it is also true that government organizations are capable of impressive accomplishments. Moreover some of the work needed by our society--for example inspecting oil rigs in the Gulf of Mexico--is best performed by government agencies. Unfortunately, the U.S. federal government has lost a great deal of its fundamental capacity over the past three decades.
This has happened due to a relentlessly ideological approach at the federal level to what management experts refer to as the "make or buy decision". The "make or buy decision" requires that every well managed organization constantly ask itself: "Should we do this in-house or should we outsource?" That is a question that should be addressed pragmatically: "what would work best?" Management in the U.S. federal government has the answer provided for them: buying from the private sector is better than making it in the government. In an article I wrote in Public Administration Review in 2001, I argued for what I called "functional matching." I wrote that some tasks are best performed by government (especially policing), some by non-profits (for example mission-driven health and social welfare programs) and some by private firms (customer driven services and manufacturing).
At the local level, government services are visible and have an immediate impact. While ideology plays a role locally, it doesn't usually dominate. In New York, the debate over charter schools has an ideological component, but the visibility of education performance measures provides evidence that moves the argument beyond ideology. Local officials are instantly accountable if water is not delivered, waste is not removed, fires are not put out and criminals are not apprehended. In New York City, most social services are now delivered by non-profit organizations under contract to the city's government. No one thinks about this practice as an ideological privatization strategy. It's simply the best way to help people in need. As a result of constant pressure to do more with less over the past three decades, New York City government has improved its performance and capacity.
In Washington D.C., symbolism and ideology drive agency management and performance takes a back seat. The story at the federal level is characterized by management incompetence. We have seen it in the Department of Interior during the Gulf oil spill, during the horror show of FEMA during Katrina, and when we analyze the overuse of contractors by an overly-small military presence during the War in Iraq. The lack of concern for capacity and management excellence has driven superb civil servants out of public service, destroyed organizational capability and made it impossible for the government to keep up with a more complicated and technologically based economy. The result has been the type of government performance we have seen in the Gulf of Mexico.
It would be helpful if the President showed more leadership on the environmental catastrophe in the Gulf. It is absolutely essential that he focus on the management of the organizations responsible for policing and protecting our environment, workplaces, and economy. However, the reconstruction of organizational capacity within the federal government will take many years, substantial resources and incredible persistence. It will also require an ideological cease fire that would return the "make or buy decision" to the purview of government managers. Can we do it? I seem to remember the answer to that question.....oh yeah.... "yes we can."
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