Module 4 Paper

Effective public management

It isn't the same as effective business management

Joseph L Bower

Are the principles of man- agement basically the same everywhere—in the public sector as well as in the private sector? Once asked mostly by academicians, the question has become of great practical importance to Americans today. A new admin- istration in Washington has pledged to bring effective leadership to the federal government. National economic plan- ning has come out of the closet and into the parlor of national debate. Energy and conservation policies are being pressed on the federal and state governments. Several large cities and states are struggling with frightening fiscal problems. And throughout the land there is an insistent clamor for more efficiency and "cost effectiveness" in. the pubhe sector. The main contention of this article is that public management is not just different in degree from corporate management but different in quality. The differences have important implica- tions for public managers as they view their jobs— for corporate managers

seeking to develop good relationships with gov- ernment and, of course, for management educators.

Mr. Bower is professor of business administration at the Harvard Business School and member of the faculty of public admin- istration at Harvard's John F. Kennedy School of Government. He is the author of Managing the Resource Allocation Process [Boston, Mass.: Division of Research, Harvard Business School, 1970I, the McKinsey Foundation book award for that year, as well as many other articles on planning and organiza- tion. In addition, he chairs the new Harvard program called Senior Managers in Government.

Illustration by Hans-Georg Rauch.

Political scientists, legislators, educators, business executives, lawyers, consumerists—practically every- one, it sometimes seems-is calling for better public management. For businessmen, the need is especial- ly important because they feel surrounded by gov- ernment institutions with which tbey are legally required to intera-ct.

But entbusiasm for good government is one tbing; understanding tbe nature of it, to say notbing of achieving it, is another. Often we seem to assume tbat effective management in tbe public sector bas the same basic qualities as effective management in tbe private sector.

Yet, several years after Watergate, Americans are still chafing at the acts of a president who claimed to have taken considerable care to keep bis office businesslike. To bim, tbat meant no leaks, absolute loyalty to tbe organization, tigbt bierarcby in struc- ture and operations, and a single coordinated voice in relations witb other organizations and tbe public. Some observers have taken tbe consequences of tbe Nixon White House to be evidence not merely of the personal failure involved but also of tbe in- herent weakness of applying a business model to government activity.

If indeed good business management is qualitatively different from good government management, we need to retbink some of our expectations of public servants as well as many common notions of man- agerial performance and training in government. As botb individuals and agents of tbeir companies, business people should operate under no illusions about there being similarities between their work and tbe tasks of public administrators.

Harvard Business Review Maich-Apiil 1977

To eompare management in the two sectors, let us begin with a common definition and an example that businessmen will readily reeognize. Manage- ment is commonly defined in some such terms as "the aeeomplishment of purpose through the or- ganized effort of others." A business executive car- ries out the corporation's purpose by building and modifying organization structures, systems, and re- lationships through the efforts of the men and women whom he (or she| recruits. As Chester Bernard, former president of New Jersey Bell Tele- phone Co., pointed out years ago, the effectiveness of a corporation can be measured by the degree to whieh it aecomplishes its purpose.' Its efficiency can be measured by whether individuals are willing to serve as workers, shareholders, bankers, and/or

A very good measure of effieieney, as we all know, is profit. The fact that the first thing we expect business managers to do is manage profitably colors our expeetations of them—of what they do as well as of how soon they do it.

For instanee, it took IBM about ten years to con- ceive and build the 360 series of computers. The effort began after Thomas Watson, Jr. became chief executive offieer in 1956, when IBM was predom- inantly a marketer and an assembler of computers. The concept of the 360 series was revolutionary. It meant formulating a new eorporate strategy. It led to major reorganization, the breaking of the power of IBM world trade |so that development could pro- ceed on a worldwide, integrated basis), the entry of IBM into eomponent manufacturing [to proteet its proprietary circuitry), the crash introduction of "time sharing" eapability, and the rise of a young, talented generation of managers eommitted to the notion of compatibility among computers.

From 1956 to 1966, IBM did just what a well-man- aged corporation is supposed to do. It achieved its purpose—gaining leadership in the industry. There- fore, it met the test of effeetiveness. In addition, during that decade its executives, other employees, and shareholders profited. Therefore, it met the test of effieieney. Having managed to meet both tests, management was above challenge for its choice of a new strategy and the time required to carry out the strategy.

The IBM example typifies our expectations of busi- ness in general. But what of management in the public sector? The late Professor Wallace S. Sayre of Columbia University once suggested that "busi-

ness and government administration are alike in all unimportant respects." On the basis of the previous discussion, it is relatively easy to show that he was right.

Sayre was correct in the first half of his aphorism, for it is true that we can talk usefully about the publie exeeutive's role in terms of purpose, organiza- tion, and people. But when we get to the content of those words, the similarity ends. Like a business, a publie organization is expeeted to serve society. But without a market to determine effeetiveness, the process of measuring beeomes diffuse and complex. Moreover, if the executives of an effective public organization distribute the surplus resources they control (that is, the excess of revenues over expend- itures) among the executives whose skills produce the surplus, the officials are put in jail when ap- prehended.

Moreover, any good Tammany politician will tell you what a few "social scientists" have just dis- covered: namely, that the most important results of activity may be related not to the stated purposes of the organization but rather to how that purpose is accomplished—in partieular, to how the revenues called "eost of operation" are distributed. To put the point in the extreme, one could conceive of an effective welfare program in whieh 85% of the funds received would go toward operating expenses. If the operators themselves would be on welfare but for the program, it would not matter so mueh that out- side recipients would get only 15% of the funds.

What does purpose mean in the public sector? As in the private sector, the administrative motive is self- interest; but the stated organizational motive is not. The neat relationship between the external view of an organization in terms of its accomplishments and the internal view of administrative arrangements is shattered. The administrator who finds a "product" to keep the Rural Eleetrification Administration alive is criticized as a recalcitrant bureaucrat, a pre- server of unneeded jobs. Though it may motivate administrative success, self-interest is eonsidered venal. Moreover, the chief exeeutive in a public or- ganization may have no presumptive right to set purpose; it may be given by legislation.

Still more difficult to cope with is the fact that the changes in formal organization and systems that are the principal sources of managerial influenee in large eorporations are only marginally available to I. Chester Beiuard, Tbe Function Haivaril UniverBity Press, ipjB].

0/ the Executive (Cambridge. Mass

Public management

Harvard Business Review March-April 1977

the public executive and can only be used at con- siderable political cost. The structure of public agen- cies is usually dictated by legislation. Furthermore, the selection and compensation of people, an im- portant business tool, is almost universally con- trolled by a civil service system.

Public management vs. private management

However management in the public sector is defined and delineated, it differs from corporate manage- ment in several important ways. Public sector man- agers frequently must;

D Accept goals that are set by organizations other than their own. D Operate structures designed by groups other than their own. n Work with people whose careers are in many re- spects outside management's control. D Accomplish their goals in less time than is allowed corporate managers.

Let us examine some realities of public management and see how important these differences can be.

One public manager's plan of action

To begin, consider the contrast in behavior of public and private executives on assuming office. The pri- vate manager is usually promoted from within the organization. He (or she) knows that in order to alter the direction of the corporation he needs to change the organization's structure and its people. Doing so is customarily his first move. Almost with- out exception, he makes changes among the key people reporting to him and modifies their johs.

In contrast, one can describe public officials as out- siders who enter office with cherished policy objec- tives, accomplish httle, and leave office with un- fulfilled desires for structural reform; for, in order to accomphsh important political objectives having to do with due process and responsiveness to the

electorate, the United States has very nearly denied the public executive the tools of management. It is almost true that the business executive's enabling resources—structure and people—are the public ex- ecutive's constraints.

How, then, can the pubhc manager accomplish his (or her) ends? First, we must remember what his goals are: like the private manager, he seeks a share of the rewards generated by his organization's activ- ity. Since this share cannot include the profits of government, he usually seeks such goals as salary, the perquisites of office, and the intangible rewards of serving the public. The intangible rewards may be ephemeral or real, but ideologically they are as important in the public sector as the profit motive is in business. The intangibles include infiuencing policy, changing the direction of events, and helping others. Common to all of them is the pleasure of exercising power usefully. Power is a necessary ele- ment of effectiveness and a reward for efficiency. Thought of as the ability to influence outcomes, power has both short-term and long-term dimen- sions. Like money, it can be spent for today's results or invested for tomorrow's.

The goal of the public manager on taking office is to "get things done" in such a fashion that when he (or she) leaves office, he will have the satisfaction of accomplishment as well as the prospect of the office becoming higher or more useful in the future. This prospect will be the result of increased respect for his personal capability or of his participation in important coalitions.

But how does he get things done when the usual sources of managerial influence in the private sector are not available? Part of the answer is illustrated hy the comments of Gordon Chase, the widely re- spected former administrator of the New York City Health Service Administration. Reflecting on his approach to that task. Chase said:

"My own view, after talking with a lot of people and thinking about it a long while, is that there were roughly four kinds of prohlems in the city pertaining to health care. Some of them I could have a large impact on; others I could not change.

"The first set of problems was a series of social and environmental dangers that affected enormous numbers of people-lead poisoning, drug addiction, alcoholism, hypertension, and so on. One character- 2. Unpublished inten City Ciiarter Study.

n Tvith the New Yoik

Public management

istic of these types of problems is that they have usually heen ignored by the health establishment. One of my first objectives was to fix that deficiency or begin to fix it, and in fixing it, to drag in by some means the health establishment. Eventually, that was done through the contract mechanism.

"There were a couple of reasons for employing this method. One was our conscious decision to try to involve the whole medical establishment. While roughly one-third of all the health services in New York arc delivered by the public sector, the largest part is still provided by the voluntary hospitals or private sector. I very much wanted to get that vol- untary sector involved in the city's problems to a greater degree, and the contract approach allowed me to do that. Involving the voluntary sector also gave me a basis to measure the performance of the municipal sector with.

"Another important reason for going the contract route was time. When we started the methadone program, we wanted to get under way very fast. It was clear to me that if we had run it as a city opera- tion, it would have been impossibly slow to set up. We would have to go to the Bureau of the Budget and the Department of Purchasing for everything. We would run into problems like not being able to pay doctors enough to do the job. We would en- counter the usual incredible amount of red tape.

"The second major thing that struck me was a whole series of irrationalities in the system. There was a bad distribution of hospitals and doctors. I could do something about this problem hut not much.

"Third, a whole series of gross social inefficiencies existed in the system. They affected enormous num- bers of people, directly and indirectly, but the med- ical establishment in the past had often ignored them. These inefficiencies affected inostly poor people.

"The fourth category of things connected with the second and third. This was the whole problem of rising health care costs." '

At the very beginning. Chase's comments seem to be describing a situation that a private sector man- ager would find familiar. The system for delivering health care in New York City had the wrong goals, functioned irrationally and inefficiently, and was

becoming very costly. But the problem on which Chase had to operate lay substantially beyond the boundaries of his agency, large as it was. He had to "drag in the health establishment." And to do that, he had to bypass the city administration and in the end use the contract mechanism.

Compressed in Chase's words is a significant point. The time horizon of the public administrator is far shorter than that of the traditional corporate man- ager. IBM had about a decade to establish the 360 computer series, as we saw earlier. In 1963, George Romney, then president of American Motors, ad- mitted that it had taken him seven years working within his company and seven years selling in the market to make the idea of a Detroit-made compact car acceptable. Fourteen years! (In retrospect, we see that even more time was needed.)

Chase sought to improve the delivery of care for lead poisoning, drugs, and alcoholism as well as traditionally defined disease in "very fast" time- how fast is not clear but certainly less that 14, 10, or even 5 years. Why so little time for such complex tasks? In part, because the public executive doesn't have more time. Our system of appointed admin- istrators gives the chief executive responsibility in operating agencies to men and women whose tenure is tied to the elected executive who appointed them.

A manager with an early deadline to meet

We will come hack to Chase later. Now let us con- sider the reflections of another former government executive.

William Ruckelshaus, appointed the first head of the U.S. Environmental Protection Agency (EPA) in November 1970, began his administration as Chase did, talking to a great many people and trying to get a sense of direction. Similarly, he found many of the operations inappropriately focused. In an interview, he spoke sharply of the importance of his time horizon:

"The automobile emission problem was obviously something we were going to have to deal with. There was going to come a time-if you read the Clean Air Act, this was in January 1971, right after it passed—that [the auto companies] were going to come ask me for some more time [to comply with the emission standards). I was going to have to decide whether or not they had made a 'good faith' effort. If this whole situation wasn't going to be completely

Harvard Business Review March-April 1977

farcieal, the first thing I had to do was eonvince the automobile industry that we were serious about enforcement. That was immediately clear to me. Otherwise, there would be no way, two years hence or whenever they asked for an extension of time, that I could conceivably make a judgment that they had made this good faith effort. So, we had to figure out how we were going to convince them that we were serious. Every 30 days we had deadlines to meet involving very complicated matters on the Clean Air Act." "

In other words, 60 days after taking office, Ruckels- haus had to take steps that would influence the be- havior of the entire U.S. auto industry. And there would be further deeisions every 30 days. Ruckels- haus pointed out that his goals were complicated by legislative and other acts:

"The agenda was, in the first plaee, spelled out in terms of the inheritance in the reorganization plan, in terms of the agencies we inherited. Seeondly, we inherited, along with those agencies, a lot of im- plementing legislation that, like the Clean Air Aet, just rapidly came on and didn't give us a lot of lee- wâ f in terms of setting not only the goals but also the method by whieh they were to be achieved.

"The Council on Environmental Quality had been in existenee since January of that year and had in its first report laid out a very extensive environ- mental agenda for the administration. There had been a lot of work done on that. The president, in his message of February r97O, had also laid out 37 separate goals that he wanted to achieve in the next year and to translate into legislation."

Goals were also set by pressure groups and elected superiors. Ruckelshaus had to concern himself with the Sierra Club, the Audubon Society, and the Earth Day movement, not to mention General Motors, Ford, Chrysler, and (if jobs were threatened), the AFL-CIO.

The resouree alloeation process is fragmented pre- cisely so that it ean be responsive to loeal wants. As long as these wants are expressed as needs or

Harvard Business School Case 4-375-083, prepared by Peggy Wiehl under the direction of Professor Josepfi L- Bower and distributed by the Intercollegiate Case Clearing Honse, Soldiers Field, Boston, Mass. 02163 (copyright 1974 by the President and Fellows of Harvard College)-

. McGeorge Bnndy, "Dam my," address delivered N

the Absolute: Notes on Authority and Auto vember 11, r97O to The Scottish Council.

demands in a way that makes good press or good politics, they find their way onto the administrator's agenda. Sometimes these local goals make good sense; sometimes they are an obstaele and a burden.

Pressure from the press

For top exeeutives in the public sector, the press is a vital eonsideration—mueh more so than for eor- porate management. The press has an important bearing on goals and time horizons. Here is what Chase had to say:

"My view is that in New York you're always going to get a certain amount of bad press because you can't avoid it. The media are very tough here; they have a lot of access. Good press is very important. You should try to build up some 'press capital'—it's good to have money in this bank for a lot of reasons. One reason is that it's good for your programs. If you get good press on what you've done and what your programs have done, it makes recruiting easier, it makes getting money easier, it makes all sorts of things easier. It also does another thing. It tends to keep people off your baek. If your press is reasonably good, it will keep people from hounding you. Presi- dent Harry Truman onee said something to this effect: 'In Washington they sometimes hit a man when he's down. In New York, they always hit a man when he's down.'

"The people in government who have a tough life with regard to the press are those people who run programs and who are responsible for pieces of the budget. You get caught if you aren't truthful, and then you're really in trouble.

"One other thing I learned was that you have, in the media, stars and nonstars. My advice to any official is that you should know with whom you are dealing. If you are dealing with a star, whether a reporter from the New York Times or a TV guy, remember that he knows he's a star and what he's interested in is looking very good. The way that he's going to look good is, usually, to make you look bad. What some guys are interested in is looking good on the six o'clock news. Other reporters, prob- ably the vast majority, really seem to be interested in what is going on."

As opposed to the business executive, who can func- tion with near anonymity, the public exeeutive must manage the fiow of information about his (or her)

Public management

agency so that he can get on with the task of achiev- ing goals. When MeGeorge Bundy was special assist- ant to President Johnson, he once eommented on what he eonsidered the pernicious impact on policy of the media's treatment of issues, espeeially tele- vision's.* Press stars must produce news that sells daily. They do not want stories about the slow, eare- ful turnaround of an organization or about the deli- cate conversion of an establishment to new ideas.

Restraints on the public manager's power

In the corporation, purpose, organization, and people are eentral themes of top management. In govern- ment, the same themes appear—but with what a differenee!

Business strategy has been ealled the art of im- balanee—the applieation of massive resources to lim- ited objeetives. In eontrast, a public institution's strategy might be ealled the art of the imperfect- the application of limited resourees to massive ob- jeetives. The point is not that a business has more money at its eommand relative to its objectives than government. Usually the opposite is true. But a busi- ness is allowed to limit its objectives to a set of tasks consistent with its resources.

If Chase's time horizon of a few years seems very short in comparison with Romney's 14 and IBM's ro, what about Ruekelshaus's? He had to set emis- sion standards for the U.S. auto industry in 60 days!

Compounding the difficulty is the laek of control of key resourees. Consider Chase's situation again. Responsible in prineiple for the health of New York, his agency dealt with only a fraetion of the organiza- tions and activities responsible for health. The or- ganizations he could control were seen as so slow to respond to his efforts that he worked around them rather than through them.

Why did he not take the slower, more direet ap- proach? Beeause he would be out of offiee long before the consequences of sueh an approach might work themselves out. An extreme example of the impact of time horizons is the ease of Jerome Miller, youth services commissioner in Massachusetts from 1969 to 1973. Having diseovered that faeilities for ineaiceration and correetion of youthful offenders

were destruetive as well as filthy and eruel, and having eoncluded that he could not make perma- nent improvements during his tenure, he closed all the facilities rather than let them slip baekward after he left office.

One reason, then, that publie seetor executives find it hard to mobilize resourees in order to achieve ob- jectives is that time horizons are short but institu- tional response times are long. It is true that agen- cies can be reorganized. But as Chase, Ruckelshaus, and many other government leaders have found out, the ageney head is unlikely to have the time, the information, or the ready control of incentives to redirect the efforts of operating levels of the or- ganization.

But this is not all. Partly because measures of prog- ress are hard to devise (in Ruekelshaus's case, for instance, what is a good measure of "elean air"?), partly beeause public accounting systems tend to be designed to control expense and not to support management and planning, partly beeause the civil serviee protects personnel from the immediate de- sires of politieal leaders, and partly beeause it is virtually impossible to change any organization's behavior quiekly-for all these reasons, publie man- agers seldom find it possible to make the ehanges they would like.

Operating managers

Both Chase and Ruekelshaus were able to bring talented people in to staff their new organizations. In some ways, these two were lueky. New leaders of old organizations are often quite constrained. But the odd faet is that public managers seldom eom- plain about the quality of their immediate sub- ordinates. It is at operating and middle management levels that complaints arise.

Compare the situation in private business. The heads of a eompany ean alter the size of the manage- ment cadre at any level. They can pay a limited number of managers well, and—perhaps most im- portant—they ean take time and money to invest in management edueation. But outside of the mili- tary and a very few eivilian career services (like the forest service and the foreign service), there is no tradition in the United States of training public managers, perhaps because it has usually been thought more important for managers to be respon- sive than skillful. After all, if a publie manager has the time and power to build a smoothly running or-

Harvard Business Review March-April 1977

Ike analyzes his presidential style Presidents and governors often face the task of "managing" wfien power over the purse, organization, and personnei rests in the hands of a iegisla- ture controiled by an opposing party. A clear analysis of

this situation is provided in a let- ter that Dwight D. Eisenhower wrote in response to 7/me's pub- iisher Henry Luce, who had assessed Eisenhowers presi- dency as insufficientiy

Augusts, 1960

Dear Harry:

I plead guilty to the general charge that many people have felt i have been too easy a boss. Respecting this there are one or two things that you might like to think over. (I do not mean to defend, merely to explain.)

Except for my first two years as President, during which I enjoyed the benefit of a very skimpy majority in the Congress, I have had to deal with a Con- gress controiled by the opposi- tion and whose partisan antagonism to the Executive Branch has often been biatantly dispiayed. The hope of doing something constructive for the nation, in spite of this kind of opposition, has required the use of methods caiculated to attract cooperation even though a natu- rai impulse would have been to lash out at partisan charges and publicity-seeking demagogues.

Another p o i n t - t h e government of the United States has become too big, too compiex, and too pervasive in its influence on aii our lives for one individuai to pretend to direct the details of its important and critical program- ming. Competent assistants are mandatory; without them the Executive Branch would bog down. To command the loyalties and dedication and best efforts of capable and outstanding indi- viduais requires patience, understanding, a readiness to delegate, and an acceptance of responsibility for any honest errors— real or apparent—those associates and subordinates might make. Such loyalty trom such people cannot be won by

shifting responsibiilty, whining, scoiding or demagoguery. Prin- cipal subordinates must have confidence that they and their positions are widely respected, and the chief must do his part in assuring that this is so.

Of course i could have been more assertive in making and announcing decisions and ini- tiating programs, i can oniy say that I adopted and used those methods and manners that seemed to me most effective. (I should add that one of my prob- lems has been to control my t e m p e r - a t e m p e r t h a t I have had to battle ali my lite!)

Finaiiy, there is the matter of maintaining a respectable image of American life before the worid! Among the qualities that the American government must exhibit is dignity. In turn the prin- cipal governmental spokesman must strive to display it. in war and in peace I've had no respect for the desk-pounder, and have despised the loud and slick talker. It my own ideas and prac- tices in this matter have sprung from weakness, I do not know. But they were and are deliberate or, rather, natural to me. They are not accidental.

As ever,

Ike

The tone is wry and managerial. Whether Eisenhower was a strong president or not, the evi- dence shows that he recognized

essential aspects ot the public management problem in a democracy.

ganization, his successor does not necessarily benefit. For the successor, that very organization may be an obstacle to the achievement of newly chosen social objectives.

This point is critical, for it may well be that, with enough time and persistence, a public administrator can move structure and people to produce the ends he wishes. The organization then becomes as ef- ficient a producer of a well-defined product as any private organization. Examples of this sort of public manager are Claude Shannon of the National Insti- tutes of Health, J. Edgar Hoover of the F.B.I., Robert Moses of the Triborough Bridge Authority and the New York State Park Commission, and Edward King of the Massachusetts Port Authority. Each of these men was able to maneuver himself into a position where his control over the personnel and structure of his organization and of the organization's access to funds was immune to political intervention. |For another example, see the ruled insert to the left.)

Measurements of performance

To list these names is to reveal a new problem. When efficient public managers achieve political monopolies that enable them to ignore market pres- sures, the costs to society ean be much greater than the costs of a business monopoly violating the Sher- man Act. The question of the costs and benefits of politically immune managers needs to be studied further, but part of the answer is likely to be found in the way we measure top managers.

In the private sector, as mentioned earlier, we rely on the market to test the purposes of private man- agers. If the market wants what they produce, the purposes are accepted. If a company wants its man- agers' efforts, it rewards the managers. In contrast, in the public sector we ask whether there is due process in the way a manager has accomplished his task. And in judging the substance of a program, we debate whether it is an efficient use of resources, given promised results.

But due process is a political end. What can it mean that we use a political end to judge the means of management and use an efficiency criterion, applied before the fact, to judge the ends of a promised pro- gram? Back in the 1960s, was Head Start a "waste of funds," as often alleged, because it was a poor idea (this was the conventional view) or because it was implemented at the operating level by inadequately skilled people (an alternative view)?

Public management

Everything we have learned about the technology of managing large organizations suggests that when the stakes of administrators are tied to short-term, intermediate outcomes rather than to the broad, long-term consequences of their action, the results are often pathological for the organization.'' Effort is distracted from and often becomes subversive of purpose.

What can the public manager do to be constructive when it is given that (1) his time horizon must be short, and (2) his elected boss—and, therefore, h e - are politically vulnerable? Direction toward an an- swer may be found in the record of how Chase and Ruckelshaus managed organizational purpose, the problem of structure, and the selection of people.

To begin with, both men were willing to lead. Each found a simple goal that helped orient his organiza- tion and that protected his political flanks. Chase's comments are instructive:

"Basically, I felt my job was making people healthy and that politics—whether with a big P or with a little p—would not, even if I handled it well, neces- sarily make people healthy. However, it was very important to handle those situations as skillfully as I could because, if I didn't, I could have a lot of trouble and the work wouldn't get done. So what I tried to tell myself, and also my staff, was that the way they had to measure themselves was to ask, 'Whom did we make healthy today?' That was the output. Having a meeting with this councilman or that community group per se was not an output."

In the same vein, Ruckelshaus explained why he chose pollution abatement as a goal for the EPA. Everyone in the organization could understand and relate his or her activity to that goal. In the admin- istrative terms we have discussed, they stated pur- pose in terms of outputs that could be measured. Chase's looser deadlines permitted him a second step that was denied Ruckelshaus. He noted:

"In my view, politics happens very often when there is a vacuum, when there is no real analysis. Then the resource allocation decision is usually based on who has more clout or who screams louder. I feel very strongly that if you don't have the analytic talent and if important decisions are up, they'll be

5. See, for example, my article, "Planning in the Firm," Amenean Economic Review, May 1970. p, 186, and Chapter 7 of the book. The Corporate Society, Robin Marris, editor (New York: John Wiley & Sons, 1974}.

made, but they'll be made by another process than analysis."

As a consequence. Chase moved early to build his own analytic capability. Ruckelshaus also created a staff for analysis, but he could not bring it to bear on the early decisions the EPA had to make.

Each man was responsible for managing a new agglomeration of previously independent agencies. Ruckelshaus moved to integrate his subunits by reorganizing from programmatic lines toward func- tional lines and by grouping the headquarters staffs in a single building. Perhaps because Chase's an- alysis indicated that he would not operate directly through his own organization, he made no structural changes in the operating agencies.

Chase did, however, make important changes in operating personnel. Most notably, he brought in professional managers as number-two men in pro- grams traditionally run by doctors. Chase's choices for top jobs reflected his concern for the lack of analysis and inefficiency that he believed character- ized the health delivery system. His choices reflected also his political sensitivity to the role of doctors in the health establishment. In contrast, Ruckels- haus drew new managers for EPA from within the traditional regulatory and federal administration structure. Forced to work through rather than around the organizations he inherited, he needed managers familiar with the intricacies of Washing- ton and with the capabilities of his subunits.

Ruckelshaus was ingenious in the use he made of the political pressure from environmentalists and Senator Edmund Muskie. With environmental goals under debate, Ruckelshaus used the environmental lobby in effect to measure his organization's posi- tion and accomplishments. The lobby's measures— and its ability to get them publicized-helped keep pressure on Congress and the White House to sup- port further efforts of his organization. In contrast. Chase took an approach characteristic of the private sector: he built reporting systems to provide quant- itative control over operations.

In sum, it would seem that both Chase and Ruckels- haus made progress because they managed to in- fluence the purpose, structure, and people of their organizations. But they were able to do this because each was able to devise a politically acceptable way of phrasing the goals of his organization. Also, each was ahle to move his organization toward the goals

Harvard Business Review March-April 1977

with actions that were politically acceptable. Both were good politicians, hut neither "played politics" in the pejorative sense of that phrase.

This presumably is the message toward which Richard E. Neustadt and other political scientists have directed our attention. To be effective in the public sector, you must be a politician. But (perhaps contrary to what they have argued is wise) you must not play for political power. Rather, it is through use of analytic and operating skills, supported by staff, that a substantive program can be developed and implemented.

Because direct access to administrative influence is limited, this task is extremely difficult. Progress comes not from revolutionary turnarounds or purg- ing of established agencies but from adjustments in the perspective, manning procedures, and measures of the existing framework. It is precisely because time is short, the tools limited, and the political con- text consuming that good public managers are so hard to find. The management job is staggering.

Discarding an old analogy

I have tried to show that American business is an inappropriate analogy for discussing and evaluating public management. In the public sector, purpose, organization.; and people do not have the same meaning and significance that they have in business. The differences would become even greater and more complicated if we could take space to recog- nize the contrasts among public organizations—regu- latory agencies as opposed to military and paramili- tary organizations, for example, or cabinet secre- taries as opposed to elected ofEicials.

Although we know enough about management in the public sector to know that it is different from corporate management, we do not know nearly as much as we should. There is enormous promise in some of the university courses in public manage- ment that have been developed around the country. They are building the base of understanding we need. If we accept as inevitable that legislatures will legislate the Second Coming at least once a sitting, and that the press will proclaim the arrival of mes- siahs and devils with weekly regularity; if we under- stand that efficiency of certain sorts implies mon-

opoly of power in a way that we do not tolerate even in the making and selling of plastic, appli- ances, or food; and if we can accept these phenom- ena as human and not pathological; then perhaps we can systematically observe how public organ- izations behave and learn how to manage them better.

Diffusion of power

The experience of the New Deal and subsequent political events ex- emplifies Samuel P. Huntington's observation that power in America is fragmented much as it was in Elizabethan England—the England from which Locke descended and which in many respects he was describing. Not only is power deliberately diffused among the three separate branches of govem- ment, which jealously guard their boundaries; but also within each of these hranches, power is dispersed among competing groups and interests. Our Presidents, like Tudor kings, have had the continuing task of creating some unity and simpHcity out of enormous diversity and complexity. This is the way our Constitution was written. As Walter Bagehot put it:

"The English constitu- tion . . . is framed on the principle of choosing a single sovereign author- ity, and making it good: the American, upon the principle of having many sovereign author- ities, and hoping that their multitude may atone for their inferiority."

Unlike the federal admin- istrative processes of other modern governments, ours have worked to disaggregate puhlic power instead of making it more coherent. . . . Our federal ahility to control the mighty has weakened; its vulnerability to control hy them has increased.

The New Ameiican Ideology, by George Cabot Lodge. Copyright © i974; i97S by George Gahot Lodge. RepriDted with the permissioD of Alfred A. Knopf; pages a73-i74-

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