IT IS VERY COMMON to hear that government would run better if it were more businesslike. I think that is correct. Nevertheless, I will turn the tables on that proposition. I believe that business would benefit from learning some management lessons from a surprisingly gifted governmental executive--Ronald Reagan.
Those of us who had the good fortune of working for President Reagan witnessed firsthand the effective management style of an unusually successful chief executive. Here are 10 lessons that I learned from observing him in action.
Lesson 1: Set Clear and Attainable Objectives, albeit Goals that Seem Difficult to Achieve. In early 1981, President Reagan set his sights on a healthier economy with lower inflation and lower unemployment. The cynics shook their heads. They only thought in terms of a trade-off between more jobs and a slower rise in prices. The cynics were proved to be wrong. Under his leadership, the United States achieved both important objectives--but not easily.
Aside from the substantial cuts in taxes, the adjustments made in economic policy in 1981 and 1982 were initially painful. They especially included a wide variety of spending cuts as well as a tight monetary policy. Nevertheless, those actions led to the longest peacetime expansion in American history. Simultaneously, the escalating double-digit inflation that the Reagan administration faced when we came to Washington has been consigned to the history books.
Lesson 2: Choose Subordinates Who Share Your Views and Outlook. Disagreements on details are inevitable among strong-minded people. Nevertheless, the team that Ronald Reagan brought together was united in our dedication to lower taxes, much slower growth in civilian spending, a stronger military establishment, and a less burdensome regulatory system. Progress in each of these areas was substantial during his eight years in office.
Lesson 3: Give Your People Lots of Leeway and Operating Authority. For example, those of us who put together the budget cuts had full discretion in assembling an ambitious assortment of spending reductions. Subsequently, President Reagan sat down with us and reviewed each significant budget change before making the final decisions.
He was anything but a rubber stamp. He did not try to micromanage the decision making within each of our agencies, but he held us accountable for the results. He empowered us to exercise a lot of discretion. For example, one of my first assignments was to perform an audit of the American economy. Nobody in the White House tried to second-guess me. President Reagan made my audit report public at a White House press briefing that we conducted jointly. My report made it clear: the American economy was suffering from a combination of illnesses--high inflation and low growth as well as high taxation, rising government spending, and excessive regulation.
The president left the press conference early, and I quickly learned that the questions would not be limited to the announced topic. After he left, I was asked why the president said he could not find his checkbook. I answered that, personally, I delegated that task to my wife. That is still true. Amid the laughter that followed, I started to answer another question. By the way, I later learned that President Reagan may not have written a lot of checks, but he used good old Treasury currency. He mailed out quite a few $10 and $20 bills in response to some heartrending letters he received.
In retrospect, Ronald Reagan was a seasoned executive even before assuming the presidency. He had been the successful governor of our largest state for eight years. Prior to that, he served as president of the Screen Actors Guild. (He loved to point out that he was the only president of the United States who had been head of a labor union.) In both capacities, he led the organization during periods of great external pressures while effectively dealing with...
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