bout de papier, Vol. 18, No. 3 (2001) — Fall 2001 // Automne 2001, pp. 5–8
… My tour of duty in Washington was from 1989 to 1993 — the first Bush presidency. Many in the current Bush Administration were also players back then — Cheney, Powell, Zoellick, Rice and Andy Card, to name a few. They know about Canada, and the importance of Canada. That is to the good, provided that their counterparts here in Ottawa attach significance to the relationship and work hard to cultivate a constructive dialogue whenever possible — and an honest compromise whenever necessary.
A lot happened during my four years in Washington — bilaterally and on the world stage: we implemented our Free Trade Agreement and negotiated the NAFTA; we concluded an accord on Acid Rain … and we launched an Open Skies initiative which has more than quadrupled commercial air links between our two countries.
Meanwhile, on the world stage, the Berlin Wall came down. The former Soviet Union imploded. We waged a war together in the Gulf, and we concluded a major multilateral trade agreement — the Uruguay Round — establishing the World Trade Organization.
… I used to say that I had the best job in the Canadian Foreign Service. I really meant it.
So how does that sort of experience compare with what I am doing today?
Usually, when people ask me what it was like to move from the public to the private sector, the tone is one of mild surprise that such a transition is manageable. This usually reflects a lack of understanding or appreciation of what it takes to be a senior public servant, as well as a certain mystique about the private sector.
I know that there is no “bottom line” in government, and that is seen as the real difference between the two. I know, too, that the absence of a “bottom line’ approach is believed to give politicians and officials in the government license for mischief and irresponsible management. As the Auditor General regularly points out — and I am sure many of you can attest from experience
— there are examples of waste and poor management in government. But they are the exception, not the rule. Nonetheless, despite bouts of fiscal belt-tightening and the fact that our federal government is now running a surplus, it is true that there is neither a profit motive nor a bottom line focus per se in government.
Departments do, however, have budgets. Officials are obliged to operate and manage within the constraints of budgets, and the are measured — at least, in part — by their ability to operate within their budgets. The magnitude of what is being managed by some departments compares with medium-to large-scale businesses.
Senior officials do not manage for profit, nor are the compensated by or for profit. They can reward and be rewarded for positive performance, even though the measure for performance can be somewhat arbitrary. Regrettably, they have very little power to deal with negative or unsatisfactory performance. It is, in my view, a serious handicap to the quality of policy advice to, and service from, the government.
It also restricts efforts to improve productivity in the public service. One of my biggest complaints while serving in government was the lack of incentive to streamline procedures and reduce costs. Too often, the size of one’s staff and/or budget determined the rank of the person in charge. So, if you reduced either, you downgraded yourself. Not much of an incentive for doing better with less. On the contrary, you have a system which can help preserve inertia – and where, too often, too few are left to carry too much of the load.
Tenure in the public service far outweighs that in the private sector, especially when you examine the average shelf-life of CEOs these days. But the life of deputy ministers in recent years is not really much more secure. Because they tend to be closer to the political heat, they can succumb rather quickly to the rash, if not the wrath, of their political masters. But those below the level of Deputy have a degree of security not prevalent in the private sector, because it is virtually impossible to remove public servants on the basis of poor performance.
Since moving on to the private sector, I have observed that, at the most senior level, senior executives are not only compensated better, but occasionally they are compensated better for failure than for success. It is more than perverse to see payoffs in the millions of dollars for senior executives who have failed to deliver value for shareholders, and yet that is what can happen.
It is hard to say, on balance, which system is better or worse. What I do know is that there is a huge difference in compensation between the two sectors. The average pay for roughly comparable work in the private versus public sector is anything from 1½ to 10 times greater. If we believe that the quality of our senior public service is a value-added element for the Canadian franchise in today’s world, we need to narrow the gap. Recent decisions to increase pay for our most senior public servants in Ottawa are steps in the right direction. (I guess that is a commercial, of sorts.)
Businessmen who enter government at the political level usually chafe at the differences in operating style. They complain about how difficult it is to “get things done” in government. But senior government officials share the complaint. I recall one colleague telling me that the basic difference between Department X and Foreign Affairs was that, in Department X, where he, as the Deputy Minister, asked for something to be done, his instruction was usually ignored. “At Foreign Affairs,” he added, “they tell me they won’t do it and also give me three or four reasons why!” It can be frustrating.
Politicians with a business background — and we don’t have many these days — tend to confuse cabinet with a Board of Directors, and electors with shareholders. There may be some similarities. A Chairman who is also the CEO is almost as powerful vis-a-vis the Board as a Prime Minister is with Cabinet. Almost, but not quite. But the bear-pit action in Parliament, or in an election campaign, is very different from the deliberations and the procedures at a shareholders meeting. That may be a major reason why so many business people stay well away from political life.
So, are there common threads between the public and private sectors? I believe the basic ingredients for success are common to both.
You need to know what it is you are trying to do, and why. And you need to be fully committed to the task. You can call that “vision,” or “strategy,” or simply “focus,” but under any label, it is the main ingredient for leadership in both sectors.
The public sector — namely, Foreign Affairs — did give me a good grounding for analysis. I also learned a lot about communication. I worked for some Ministers who allowed about 30 seconds for briefings before Question Period, and others who would subject you literally to an intense oral exam on topics as diverse as the provisions of the Anti-Ballistic Missile treaty or the migrating habits of the Porcupine Caribou herd along the Alaska-Yukon border. We also learned to prepare coherent, if not necessarily convincing, memos to cabinet on anything from quotas on shoes to the key elements of a free trade agreement.
And, as an Ambassador, notably to Washington, I was obliged to communicate diplomatically, but often forcefully and persuasively, in defence of Canadian interests to the Administration, the Congress, the media and to various audiences in America’s heartland, as well as here at home. It was a rich and varied experience which I believe prepared me well for Board meetings and meetings with shareholders, and helped me guide, as well as lead, the management of one of Canada’s foremost high tech companies (whoops! another commercial …).
Foreign Affairs also gave me experience in adapting to different issues, different cultures and different people. I had many assignments during my thirty-year career, and learned to act and react in a wide variety of challenges and settings. They may not have constituted “bottom line” experiences, but as an Ambassador or as the Chief of Staff, there was definitely a front-line exposure that has proved advantageous when it comes to representing publicly the interests of my company.
I suppose the single most useful and relevant experience I gained from my public service was in crisis management. It is, in fact, the best way to describe the basic challenge of my assignment as the Prime Minister’s Chief of Staff. Almost every day brought a different crisis or conflict for resolution, and more often than not, under the intense glare of the media. It was an exercise in stamina as well as stress, with equal parts of frustration and exhilaration. The art of survival was paramount to the art of success. But, as a survivor in what I believe is one of the most demanding jobs in government, I was ready to take on just about any new challenge. So you might say it was a catalyst for my move to the private sector. It also helped put most of my new challenges in a healthy perspective.
The art of selecting good people is a crucial part of management in each sector. In government, the talent pool and the process for selection are restricted. In the private sector, the pool and the process are relatively wide open. The judgements are not dissimilar — and about all I can observe is that more latitude does not necessarily guarantee higher quality.
One big difference is that the private sector is more private, especially when compared with high exposure jobs in government. You have more scope for offence and more control of events in the private sector — control of everything, of course, except for the stock market.
At the end of the day, what counts in terms of success and fulfilment in either sector is performance. The risks and rewards can be very different, but the challenge and the satisfaction of doing something well is common to both. That is why I believe many of the skills are transferable. That is also why I wish there were more opportunities for interchange between the two. There are several examples of senior public servants who have move successfully to the private sector, but very few moving the other way. Canada would benefit from more because I suspect that one of the weaknesses of our senior public service is its insularity — geographically and attitudinally – from the environment in which the private sector operates.
The Americans change their senior bureaucrats and get transfusions of new blood whenever there is a change in the White House. In Canada, we pride ourselves in the stability of a senior public service which remains in place even if the government changes, occasional as that may be. The problem in Washington is that the unique American system of checks and balances constrains severely the degree to which any new team can act. The Parliamentary system, on the other hand, can act decisively and quickly, particularly if there is a majority government. But the lack of new blood often means that there is a shortage of new thinking below the political level. I would not advocate that we change systems, but I think we would all benefit from some injections of new thinking at the top of the Canadian bureaucracy. And that is my last commercial.
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Originally published in bout de papier, Vol. 18, No. 3 (2001) — Fall 2001 // Automne 2001, pp. 5–8. Read the rest of this issue →
