In August the American people got their first (but probably not last) management tutorial from our first (but probably not last) MBA president. In his weekly radio address, and an accompanying White House report, George W. Bush (Harvard Business School, ’72) unveiled a governmental reform agenda featuring such ostensibly eye-glazing topics as rightsizing, increasing competitive sourcing, integrating performance data with the budget, delayering the bureaucracy and expanding electronic government.
His agenda, delivered to a yawning public in the deadest of the media’s summer doldrums, was not exactly earth-shaking, but it represents the start of something that really is — a now-dawning, decades-long effort to thoroughly remake government. Driven largely by the revolutionary technological changes in the private sector, the impact on American democracy and society will transcend everything else that affects the public sector, from partisan politics to economics to traditional ideological battles.
What makes me so sure? Because this has happened before. A century ago, it was Teddy Roosevelt and the Progressives who were the starry-eyed reformers seeking to reinvent government in the image of the private sector. Ironically, the reformers’ goals today involve unmaking much of what the Progressives wrought.
The rigid, hierarchical bureaucracy that Mr. Bush hopes to overthrow is a product of the Industrial Age, whose revolution, hewn in steam and steel, transformed us from an agrarian nation into an industrial powerhouse, remaking American business, society and government in the 20th century as thoroughly as the Internet will reshape them in the 21st. The Industrial Revolution made a lot of companies very rich — and the nation embarked on an efficiency campaign led by people like Frederick Taylor, whose “scientific management” theory advocated finding and following the “One Best Way” to do everything — from homemaking to building cars, from growing roses to shoveling coal.
Why, wondered Progressives like Teddy Roosevelt and Woodrow Wilson, shouldn’t modern management techniques transform government as well? Why not let industrial efficiency help manage the ever-growing administrative state? Ideas like interchangeable parts and one-size-fits-all production were great at making cheap Springfield rifles and Model T Fords. Why not apply them to bridge-building, public education and managing the public-sector work force?
Cut to the present. One hundred years, one Information Revolution and one multi-trillion-dollar Great Society later, private sector mass production has given way to personalization and customization. Horizontal networks have supplanted vertical hierarchies. The Organization Man has been replaced by the “free agent.” American government, however, remains more or less the same swollen, rules-based colossus that the best minds of Herbert Hoover’s generation could devise. “We have a networked society and economy,” says Harvard professor and presidential advisor Stephen Goldsmith, “and an industrial-aged government.” Just as the early 20th century’s sleepily parochial governments transformed themselves into sprawling bureaucracies to keep pace with industrialization, that lumbering, inflexible, messy, inefficient institution we call government today must — and surely will — transform itself in honor of the Digital Age.
Progressive Era leaders had a blind trust in the ability of government “experts” to solve society’s problems. Today, blind faith in experts — particularly of the D.C. variety — is long gone. The public sector’s information monopoly was shattered by the Internet — and almost everything else about Industrial Era government will be shattered, as the “One Best Way” mentality gives way to individual choice and personalized, citizen-centric services. As governor, Mr. Bush opened up close to a dozen Texas programs to individual choice — from services for people with disabilities to housing assistance for low-income seniors. For these services and others, Texans now have the freedom to choose the best provider to meet their particular needs. Expect more of the same from President Bush.
There are countless other ways that government will change. Going fishing? Imagine buying your gear — and your state fishing license — from one e-commerce site at the same time. Or paying your taxes online through your local bank. Or getting your passport renewed through a travel site. Ever looked for a nursing home or a rehab facility? Today’s frustrating maze of public programs, unintelligible rules and overworked social workers will give way to Web sites that expertly pair individuals with the programs that best match their unique circumstances. In one venue after another, government won’t just be more efficient; it will become almost invisible, as the lines between the public and private sectors blur, turning thousands of state and federal field offices into virtual service industries that respond to changing conditions as swiftly as your average Fortune 500 capitalist paragon.
In ways the Progressives could never even imagine, information technology will provide powerful tools for improving the public’s access to government performance. Already, visitors to NYC.gov can see the most, recent, up-to-date crime statistics in their neighborhood. You can also see if welfare caseloads are going down or up in the city, whether the Child Welfare Agency is meeting its monthly performance targets and how your neighborhood restaurant did on its health inspections. “Putting all your performance statistics on the Web — good ones and bad — creates a more realistic set of expectations for the public,” explains New York City Mayor Rudolph Giuliani. “You don’t have to pretend that everything is perfect.”
Reform tools like competitive sourcing and electronic government, a.k.a. “eGov,” will allow the state to do more with less. Already, Office of Management and Budget Director Mitch Daniels, the Bush administration’s chief champion for government reform, has directed federal agencies to open up thousands of public sector activities to private-sector competition. The goal: replace bureaucratic monopolies with nimble networks of public and private providers (what Mr. Daniels dubs “antitrust on government”). The inevitable result: a smaller federal work force and — over time — dramatic cost savings.
Companies like IBM and Cisco already save hundreds of millions a year by putting their purchasing, supply-chain and customer service systems online. Replicating the private sector’s 20% average savings from putting processes online could save American government at all levels over $110 billion a year — about $1.3 trillion over 10 years, roughly as much as the Bush tax cut.
Of course, defenders of the status quo — the bureaucrats, interest groups, congressional committees, and contractors that have grown accustomed to feeding off this outdated system — will fight every last attempt to update it. But economic, social and political pressures will soon force a day of reckoning, as they did at the beginning of the last century. Our MBA president’s management tutorial was merely an early announcement that the information-age government reform juggernaut is coming.