The business of government

So you want government to run like a business? If that’s your desire we’ll have to manage the inherent challenges in our operations department.

In business, customers always want a consistent product. In order to stay profitable you have to find innovative ways to provide it faster, friendlier and with more value. It’s called the free market.

In government, customers rarely want a consistent product. Some customers might support a certain initiative and yet even more customers may oppose that very same idea. The goal is to please just enough customers to get re-elected, it’s called representative democracy.

In business, decisions are made quickly with no public input. In government, decisions are made slowly with public process being the road to resolution.

In business, hiring management is based on extensive searches and interviews. In government, hiring management is based on whoever survives the primary. And sometimes the final decision is an exercise of choosing the lesser of two evils.

That leads us to the one challenge that will always determine the success or failure of any business or government, the quality of the management. So how does our company’s management compare? Lets compare a well-known business against our company, the Alaska State Legislature, in order to see how our management differs during difficult financial times.

Alaska Airlines has long been recognized as one of the premier airlines in the country. But even with exceptional service and a lion’s share of the Alaska travel market, the carrier has not been able to avoid rising operating costs, lower yields and over capacity that has plagued the entire airline industry.

In an effort to reduce expenses, the company’s top executives recently announced they would be taking voluntary salary cuts while trying to negotiate labor savings to keep the carrier in profitable skies.

In June, Chief Executive William J. Ayers informed employees that he and other Alaska Air Group senior managers were cutting their annual salaries anywhere from 15 to 20%. This comes at a time when seven larger competitors, many in bankruptcy, have achieved savings through similar measures. This is truly leading by example.

The Alaska State Legislature has been dealing with similar financial woes, but for much longer. Over the last ten years they’ve been losing money almost every year, only being able to pay the bills by accessing reserve funds. Unfortunately, they’re on the verge of spending up the remaining balance in the reserve account and there is no solution on the horizon.

So what has our management done to reduce expenses? Their response was to take services away from customers who need them most, children and seniors.

In May, our majority management passed legislation that takes health care coverage away from over 100 pregnant women and 1,200 children. This was passed and signed by the governor despite the testimony of health care experts who warned that the elimination of preventive care would end up costing the state much more than the projected savings.

Last week, it was announced that there wasn’t enough votes among majority management for addressing the veto of the longevity bonus for Alaskan seniors. To add insult to economic injury, they didn’t even have the courage to make it known to their constituents how each manager voted.

So how about our management’s commitment to sharing the financial pain? No voluntary salary reductions here.

In fact, according to the Legislative Affairs Agency, managers who supported eliminating programs for children and seniors claimed an average of over $76,000 last year in compensation. And that doesn’t even include the free health care coverage and generous retirement benefits they enjoyed.

That’s sizable compensation for citizen legislators working a part time job.

And if that’s not enough, they increased their donation limits so each manager could receive more money from lobbyist and big donors to keep their jobs. So much for leadership by example.

The moral of the story is that if we want government to run like a business, we need to start hiring managers who actually know how a successful business runs. Otherwise, Alaskans will keep seeing nothing but pure funny business.

Next time we’ll chat about our marketing department.