James’s Musings

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Government that “Gets It”: The CEO Mentality Comes to Local Government

by James Beldock on July 31, 2010

One of the reasons I value my regular involvement with the Aspen Institute is the opportunity to watch what I occasionally refer to as “leadership cross-fertilization” in action. Earlier this month, I had the opportunity to watch business pragmatism cross fertilize with public leadership, and it was inspiring.

At a recent Socrates Society event, we were lucky enough to have a Rodel Fellow of the Aspen Institute, Mayor Kasim Reed of Atlanta, who was joined by the innovative schools Chancellor Michelle Rhee (of the DC Public School System), as the evenings panelists. After an introduction by the President of the Institute, Walter Isaacson, they were interviewed by none other than David Gergen, advisor to four US Presidents, CNN’s senior political analyst, professor at Harvard’s Kennedy School of Government, and a Trustee of the Aspen Institute. Since my own involvement with the Institute began as a 2001 Crown Fellow of the Institute, I am used to the Institute gathering highly successful leaders and offering them an opportunity to speak candidly. The Crown program is primarily focused on the rising generation of business leaders. (Indeed, in my 15-person fellowship year alone, everyone was or had been a founder or CEO of a meaningful company.) But at the time, the Institute did not have a similar program for young political and government leaders. In 2005, Aspen Institute Trustee and President of the Rodel Foundations, William D. Budinger, and former Congressman Mickey Edwards created the strictly non-partisan Rodel Fellowship to fill precisely that void.

Mayor Kasim Reed of Atlanta (left) and Chancellor Michelle Rhee of the Washington, DC Public Schools System (right). Mayor Reed was a 2007 Rodel Fellow of the Aspen Insitute.

Five years later, it is clear that the Rodel Fellowship picked well: Mayor Reed, a Rodel Fellow of the Institute, and Chancellor Rhee spoke candidly about the leadership challenges they face. When asked by David Gergen (who doesn’t know how to ask an easy question) how he handled the structurally unsound pension liability that he faced literally within weeks of stepping into the Atlanta mayor’s office, Mayor Reed provided the evening’s most clear moment of “cross-fertilization.” He put his CEO hat on and described the meetings he had with union leaders in which he explained the financial realities — just as a CEO must when he must change benefits or even adjust the size of his workforce. Especially in today’s age of tight budgets and high unemployment, financial pragmatism may not be popular, but it affords a serious public leader a unique opportunity: to make difficult decisions which result in long-term benefits, even if they attract short-term criticism.

Later, Chancellor Rhee afforded us another glimpse at business pragmatism influencing local government. Early in her tenure, she was forced to lay off a portion of the teaching force in Washington, D.C. (She did so again just a few days ago.) The Chancellor took some heat for performing that layoff not based on seniority but on teacher performance. Now, as a business leader, I would struggle to justify a layoff based on anything other than performance, even if I did have a unionized workforce, but of course Chancellor Rhee faced a tooth-and-nail fight to do just that. She found a creative way to fund her system (by raising private corporation donations for community improvement)—predicated on continuing the City continuing to assess teacher performance as part of their retention and reward program (and her continued tenure). Chancellor Rhee has been the subject of fierce attack for her efforts, but she has persevered, with the help of her boss, Mayor Adrian Fenty.

And then came the final moment of cross-fertilization for the evening: a classic business leadership technique offered by Mayor Reed as the right public leadership approach to such a circumstance. Sometimes, he commented, it is necessary for the mayor to “stick his chin out,” and take a punch in order for his subordinates to execute to an aggressive plan. Business leaders know this one well: hire people smarter than you, give them both authority and responsibility, then get the hell out of the way — until they need support. My good friend and former colleague Catherine Ruggles, who at one point had 400 software developers reporting to her at Symantec, used to put it this way: “take the blame for everything and the credit for nothing.”


Mayor Reed (left) and Institute Trustee David Gergen (right)

I, for one, find it tremendously encouraging to see that kind of leadership pragmatism cross-fertilizing and thus making its way into the next generation of public leaders. God knows our country needs public officials and leaders who are willing to take a hit or two, remain pragmatic, and push for the changes we need.

Laura Lauder August 7, 2010 at 3:57 am

How very articulate and insightful, James – we’re so glad you blogged about this special evening.

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