The Management of Power

What Governments Should Learn From Business

A private company rarely survives once it begins filling its positions with people who lack the training, the experience, or the right profile. The consequences appear quickly: productivity falls, errors multiply, resources are wasted, and customers lose confidence. In the business world, incompetence carries an immediate cost because the market punishes organizations that fail to deliver results. Yet when this same problem occurs inside a government, the consequences tend to stretch on for years and directly affect millions of citizens.

In a company, every hire responds to a specific need. A chief financial officer must master finance; an operations manager must know the production processes; a head of human resources must know how to manage people. If these positions were filled purely out of friendship, loyalty, or favoritism, the organization would begin to decay from within. What is troubling is that, in many governments, this practice has been normalized through political appointments that place proximity to power above professional ability.

When decisions rest in the hands of unprepared people, improvisation replaces strategy. Problems are no longer prevented; they are addressed only once they have become crises. In a company, this kind of management would end in financial losses and, most likely, bankruptcy. In a government, the cost is far greater: failing hospitals, underfunded schools, unfinished public works, rising insecurity, and ever less efficient public services. The difference is that a company loses customers; a government puts the well-being of an entire society at risk.

There is another fundamental difference. Companies are required to measure their results constantly. If a project fails, if sales decline, or if productivity drops, executives must answer to investors and boards of directors. Some governments, by contrast, replace indicators with speeches, press conferences, and communication campaigns designed to convince the public that results are better than the facts actually show. Perception ends up displacing evidence.

Equally troubling is the absence of consequences for those who make bad decisions in public administration. In the private sector, an executive who accumulates failures is usually replaced to protect the organization’s stability. In politics, that is not always the case. Officials with poor track records can remain in office for partisan or political reasons, even when the results show they lack the abilities their duties demand. This lack of accountability weakens institutions and erodes public trust.

A modern government should manage talent with the same rigor as the most successful organizations. Public offices should be filled on the basis of merit, experience, leadership, technical ability, and commitment to public service. Public administration cannot keep operating as a space for rewarding political loyalties or repaying electoral favors. When merit stops being the main requirement, institutional efficiency becomes the exception rather than the rule.

Politics needs to understand that governing also means managing complex organizations. A ministry, a secretariat, or a public agency manages multimillion-dollar budgets, coordinates thousands of workers, and makes decisions that affect the daily lives of millions of people. If a company demands professionalism to protect its assets, a government should demand excellence all the more to protect the well-being of its citizens. Incompetence in the public sector is not merely poor administration; it is lost opportunity for an entire nation.

Society tends to demand results from companies because it knows that, otherwise, they will disappear from the market. Yet it is often far less demanding of those who manage public resources. Perhaps the time has come to apply the same principle to our governments: judge performance by results, require professional credentials for positions of high responsibility, and reject improvisation as a way of governing. A country’s future should not depend on the political loyalty of a few, but on the ability, the ethics, and the commitment of those who hold in their hands the decisions that matter most to everyone.

References

La dirección de organizaciones. (2009). La dirección de organizaciones: Un enfoque estratégico. Ciudad de México: McGraw-Hill Interamericana.