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 difficult personalities inside the organization. Lesson 4: Strongly Back Your People, Especially When They Are Attacked for Trying to Carry Out Your Policies. I’ll give you a very personal example. In public presentation describing the budget problems facing the United States, I had the temerity to suggest that annual Social Security benefit increases (the so-called cost-of-living adjustments, or COLAs) were not part of an insurance program. They were really welfare benefits paid by someone else, in this case the working population. Some member of the Congress was so angry with me that he urged my impeachment. I was very relaxed. The odds were that, if the issue ever did reach the president, he would just have a good laugh. Of course, the threat of my impeachment quickly evaporated. Lesson 5: Use Humor to Good Effect.
Yes, Ronald Reagan loved to tell funny stories. One of his favorite ones concerned the boy who was digging through a manure pile. His explanation for that strange action was that there had to be a pony in it somewhere. But usually the president’s purpose for telling a humorous tale was very serious. He was always too polite to tell some boring person to shut up. Rather, he preferred to interrupt by telling a story. When he finished, the discussion would quickly shift to a new subject. On other occasions, when the internal debate was in danger of getting too strident, he would break the tension by telling another funny story.
He possessed a deep inventory of humor, much of which drew upon his authentic Irish brogue as well as a fine Italian accent. Thus, it was a real treat just to have a casual meal with him. Lesson 6: Communicate Clearly Both Within the Organization and to the Larger Public. Ronald Reagan truly was the “Great Communicator,” but the results did not come effortlessly. Let me try to give you an idea of how the process worked. His address to the nation in early February 1981 was going to be the occasion for his publicly laying out what became Reaganomics.
The process of writing this important speech revealed much about the man. He assembled a group of his key advisers and speechwriters in his living quarters on the top floor of the White House. (He often said that he lived above the store. ) The first session was devoted to developing the major themes of that first big economic speech. We all had a chance to get our oar in. When the president was satisfied with the results, he adjourned the meeting with the understanding that the speechwriters would work up a rough draft of our common thoughts. The rest of the group polished the speechwriters’ first draft.
The revised draft speech then was sent to the president. He rewrote it in his own language on a yellow pad. That’s why his speeches were so convincing. After his handwritten draft was typed, the whole group reassembled. The president held the master copy and he led us through it paragraph by paragraph to get our comments. On several occasions, I told him that a section was not accurate. He never pulled rank. After all, it was his speech. He always responded the same way, “OK, how do I make the point accurately? ” That is an example of how Ronald Reagan inspired loyalty.
The process also showed that his deep personal involvement in writing the major messages was essential to the successful communication of the contents. [ILLUSTRATION OMITTED] At a much later point in his administration, the bureaucrats tried to eliminate the “provocative” line from his memorable speech in Berlin, “Mr. Gorbachev, tear down this wall. ” Happily, the speechwriter–the president himself–prevailed. By the way, in comparison I certainly was not a great communicator. Of course, my job required me to make many economic presentations, both in the White House and to a wide array of congressional committees and private organizations.
On one occasion, an anonymous colleague circulated a parody of my standard economic briefing to the Cabinet. I don’t think I really sounded like that. But here it is so you can judge for yourselves: “Economic data show an easing of the rate at which business is easing off. This can be taken as ample proof that there’s a slowing up of the slowdown. “Now, to clarify that, it should be noted that a slowing up of the slowdown is not as good as an upturn of the downturn. On the other hand, it’s a good deal better than either a speedup of the slowdown or a deepening of the downturn.
Also, it suggests that the climate is about right for an adjustment of the readjustment to interest rates. “Now, turning specifically to interest rates, we find a very definite decrease in the rate of increase. This clearly shows there should be a letting up of the letdown. Of course, if the slowdown should speed up, the decrease in the rate of increase would turn into an increase in the rate of decrease. “And finally, the inflation of the recession would turn the recession into a depression, while a deflation in the rate of inflation would give the impression of a recession of the depression. Lesson 7: Let Your Staff Do the Worrying; That’s What They Get Paid for. Ronald Reagan took the presidency very seriously. He may have left the Oval Office at 5 p. m. , but he spent hours in the evening reading our reports and memos. I learned that quickly when he called one evening to discuss a memo that I sent him after 5 p. m. More frequently, he would comment on items that some of us had sent him the previous day as he entered the Cabinet room in the morning. Perhaps most important, after making a decision, President Reagan did not stew about it.
He quickly went on to the next item of business. Lesson 8: Take an Upbeat and Positive Attitude. That proved to be the key to maintaining internal enthusiasm and generating external support in a period of great policy changes. A dramatic example was provided by President Reagan’s response to being shot. The momentum of his administration did not falter. In fact, one wisecrack to his wife did more to reassure the concerned public than all of the medical reports, “Sorry, honey, I forgot to duck. ” That was truly grace under pressure. Lesson 9: Distinguish between Opponents and Enemies.
To my knowledge, Ronald Reagan never kept an “enemies list. ” That was not in his nature. He did not know how to hate. He also was wise enough to know that today’s opponents on one issue may be tomorrow’s supporters on another–provided that you had not treated them as an enemy. Lesson 10: Keep Some Distance from Your Subordinates. The president was very cordial and caring. At times he would chide some of us for working too hard (to put it mildly, we were highly motivated). Nevertheless, he knew that he was not our buddy, but our leader.
By the way, it did not take long to realize that, although you may be spending a lot of time in the White House, you were not the president. Many of my briefings to various interest groups followed a fascinating if not humorous pattern (they did not strike me as funny at the time). Typically, I would make a short presentation to people representing business or labor or minorities or other organizations. This was usually followed by vigorous and occasionally hostile questions. At some point, the president would join us. The tone of the meeting quickly changed.
The visitors were all smiles. When he asked them for questions, the typical response was to thank him for the visit and to toss a real softball. As soon as he left, however, the group would resume its tough questioning of me. I cannot resist offering another example of the distance between the president and the members of his staff. When he was not using the presidential box at the Kennedy Center, he generously let his associates use this “perk. ” On one occasion, when I wound up sitting in the president’s seat, the audience could not suppress its disappointment when the lights came on.
Nevertheless, my wife and I thoroughly enjoyed the evening! It was a great privilege to serve President Ronald Reagan during an important period in American history. I came away with many fond memories. For example, I have a picture with the president and Nancy on which he added a teasing note thanking me for “explaining the dismal science to Nancy. ” (He loved to quote at me Thomas Carlyle, the 19th century British writer who referred to economics as “the dismal science. “) Working for Ronald Reagan was anything but dismal. Yes, it was very nice for U. S.
News to list me as one of the 30 most influential Americans in 1981 and again in 1982. Of course, I was quickly dropped from the list when I returned to St. Louis in 1983. On that note, also recall the lady who stopped me as I was getting off the elevator of a Washington hotel. This was two weeks after I left the White House. She asked me just one question, “Didn’t you use to be somebody? ” Murray Weidenbaum holds the Mallinckrodt Distinguished University Professorship at Washington University, where he also serves as the honorary chairman of the Weidenbaum Center on the Economy, Government, and Public Policy.
In 1981 and 1982 he was President Reagan’s first chairman of the Council of Economic Advisers. In that capacity he helped formulate the economic policy of the Reagan administration and was a key spokesman for the administration on economic and financial issues. During the years 1982-1989 he was a member of the President’s Economic Policy Advisory Board, Corporate boards he has served on include Beatrice Foods, Contel, May Department Stores, and Medicine Shoppe