crypto and public policy

A Lesson in Bad Management

Filed under: General March 23, 2004 @ 10:56 pm

When George W. Bush ran for President in 2000, we were told that he was going to be the first president with an MBA, the first president truly able to manage a large-scale organization with the skills of a corporate CEO. As a well-trained manager, Bush was going to surround himself with skilled experts in order to make informed decisions. He was going to hold governmental organizations accountable for their performance, Key Performance Indicators and all.

What’s transpired in the latest revelations by Richard Clarke (and before him Paul O’Neill) should be crystal clear to anyone in the business world: Bush and his team are the classic example of bad management.

1) Ignore Your Predecessor’s Experience.

When you take charge of an organization, there’s a period of learning on the job. Chances are, your predecessor’s experience is a fantastic resource to help you learn more quickly, even if you disagree with his approach and philosophy. Bush and his team completely ignored all of the Clinton team’s work, especially on the Al Qaeda threat.

2) Remain Disconnected from the Leaves of your Organization.

Bad news often doesn’t travel upwards in the hierarchy. This effect is sometimes called the “bad news diode,” because the default behavior of individuals is to hide bad news from their superiors in the hopes that they can “fix it” before anyone finds out. Good CEOs know that they must create incentives for collecting news (both good and bad) and helping it travel up the decision-making hierarchy. That’s why restaurant owners walk around and ask customers how their meal was. That’s why some companies have anonymous suggestion boxes. Paul O’Neill’s book describes how Bush is fed highly edited versions of the news by his staff. Anti-Bush protesters are kept so far away from the President that he has no way of seeing the public’s disapproval. And in a now-classic story from a couple years ago, Bush responded to a constituent he met at a picnic “who cares what you think?” Bush – our country’s decision maker – has no idea what’s actually going on and he doesn’t care to find out.

3) Force Facts to Fit your Theories.

If a superior orders some kind of survey or research with a clear slant as to how he wishes the outcome to look, the research is effectively corrupted. A leader cannot wish his theories down upon facts, especially when these facts are critical to making correct decisions. Bush and his team consistently twisted intelligence agencies’ arms into linking Iraq to Al Qaeda when said intelligence agencies repeatedly claimed there was no such link. The result: a remarkably bogus claim during the State of the Union and a war based on completely false pretense.

At the end of the day, a CEO’s job is to create an atmosphere that greatly enhances the organization’s ability to collect facts, analyze them, and rapidly act in response to change, all in the context of a long term strategy focused on the organization’s well-being. With a huge deficit and no plan to pay for it, actions based on dubious evidence, a huge credibility gap, a rapidly weakening set of alliances, and a growing enemy fueled by short-sighted actions, Bush has failed in all respects.

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