One of the most pernicious myths of Washington business is that the government--and virtually everything else--would be vastly improved if the people in charge would just "run it like a business."
Candidates have captured every office from dog catcher to president of the United States by promising that the moral equivalent of the profit motive would become the guiding principal of their administration.
Worse yet, they've kept their promises, giving us such a stunning success as the U.S. Postal Service. Freed from the perils of politics and patronage and now "run like a business," the mail service costs more and delivers less.
Despite such self-evident shortcomings, the urge to "run it like a business" continues to flourish, infecting Washington with ill-thought initiatives like the plan to sell the Weather Bureau.
Neither rain, nor sleet nor gloom of night would seem to be ingredients of a profitable enterprise. But no doubt a weather bureau run like a business could market the exigencies of nature with as much success as the postal service defies them. Like the mail, the weather forecast might not arrive when expected, but that would be a small price to pay for the ideological satisfaction of knowing the weather bureau is run like a business.
The run-it-like-a-business bug is even spreading into the private sector, where it is demonstrating the ability to transform perfectly adequate nonprofit institutions into bungled "businesses."
Ironically, the U.S. Chamber of Commerce was the first private, nonprofit organization to get burned by its business-like approach but now other Washington institutions have fallen victim, including National Public Radio.
While presenting itself as not only the voice of business, but also the most business-like of the Washington trade associations, the U.S. Chamber has run up multimillion-dollar deficits. Audited financial statements due this spring should reveal just how good "business" is for the Chamber of Commerce. Last fall's lay-off of some 30 employes is a pretty good clue to the success of the Chamber's broadcasting and publishing businesses.
Instead of using its magazine, Nation's Business, as a service to communicate with its members, the Chamber decided to run Nation's Business like a business. While the magazine vigorously expresses the Chamber's views, it has apparently been less successful as a business. In recent months, the Chamber has had to explain why the magazine's circulation fell several hundred thousand subscribers short of what advertisers were charged for.
There is, perhaps, a certain justice in the Chamber of Commerce being seduced by its own rhetoric. It would be hard to find an organization that has preached the virtues of "running it like a business" more often than the U.S. Chamber.
But National Public Radio is no captive of corporate ideology. The likes of the Chamber of Commerce have been known to suggest that NPR is virtually socialized radio, the commercial-free antithesis of free enterprise.
So what did NPR do when government subsidies and corporate contributions ran short? You guessed it--they decided to go into business, forming profit-making partnerships that were supposed to finance nonprofit broadcasting. But now, just like the Chamber of Commerce, NPR is laying off people and canceling projects because its business ventures are proving to be something less than hoped for.
That's the first lesson that ought to be taught to people who believe government and nonprofit associations should be run like a business: Businesses can and do fail with predictable regularity. Even well-run businesses fail, but more often, failure is the result of management mistakes. It is no coincidence that NPR has a more elaborate satellite communication system than some commercial radio networks and that the Chamber of Commerce boasts of perhaps the best-equipped television studios in town, far fancier facilities than the profit-oriented Cable News Network.
Frank Mankowitz at NPR is a brilliant journalist and Richard Lesher of the Chamber a shrewd politician, but nobody ever accused either of them of being an entrepreneur. Lesson two: business requires a different kind of leadership than politics or government.
More than just management, style is involved. The reality is that weather forecasting, mail delivery, business advocacy and public broadcasting are not businesses. Their first and foremost goal is to deliver services, not to make a buck.
One of the marvels of the free market economy is that when services can be provided at a profit, somebody does it. The Mafia in several cities collects garbage cheaper and better than government employes; the National Geographic Society uses profitable publications to finance its educational activities; Federal Express and United Parcel Service make money competing with the mail.
But UPS doesn't want to deliver all the mail--just the profitable part--and there are services that even the Mafia couldn't make money on. The inescapable conclusion is that the goals of service and profit are often incompatable.
Beyond these obvious operational lessons there is a philosophical challenge that must be raised to the notion that public services are best "run like a business;" that is the matter of assessing responsibility.
Real businesses must answer to their stockholders in the same way that governments respond to the voters. In the bad old days, the Post Office responded to its constituents through the imperfect process of political patronage, but at least it responded.
How do the listeners of NPR, the corporations of the Chamber of Commerce or the clients of a profit-making Weather Bureau hold their management accountable?