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By Phil Piemonte

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Should your agency be run more like a business?

Every once in a while the argument surfaces that government should be run like a business.

Well, one federal entity already is run like a business: the U.S. Postal Service.

And now the Postal Inspector General, after digging around at the request of Sen. Susan Collins, R.-Maine, has come up with one tidbit that does, in fact, make USPS sound a bit like a major corporation.

According to the Postal IG, USPS pays for 100 percent of the health benefits it provides to its senior executives—all 835 of them. That’s a sweet executive perk in any sector.

But before you react, consider this: Today’s USPS management in all likelihood is moving a lot more quickly than the old Post Office would or could have moved to meet today’s changing market requirements. One could argue that the healthcare perk is just one tool in recruiting and keeping the best top execs.

Do you think your agency could or would benefit from being run more like a business? Would it make things better or worse?

Posted by Phil Piemonte on Sep 28, 2010 at 12:13 PM


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Reader comments

Wed, Dec 29, 2010

Isn't that what the "New Business Model" is? A plan to privatize government? Just look at how well it has been working in the private sector for the last 10-20 years... Centralizing services, putting less able folks in positions of authority so they can more easily be controlled from the top, expect more work with less people.... Yes, it works so well out there....

Fri, Oct 8, 2010 Glen Dallas, Texas

Absolutely government should be run like a business. Part of that is setting objectives, pursuing objectives, and (has the head of GE used to say) "hitting your numbers." That is separate and apart from whether or not you turn a profit. It's also a big enough tent to cover DoD operations, healthcare operations to the National Parks. Businesses operate within a legal and regulatory framework so the argument about Congressional oversight is not wholly applicable.

Additionally the USPS is "quasi"-business but they aren't permitted to operate like a business. The Board of Governors are responsible for operations but Congress decides how much they can charge for their services, what services they can offer, and under what conditions they deliver their services. The USPS has set forth some really good ideas for turning the USPS around but each time Congress has said, "no you would be competing with private businesses." Duh, this is supposed to be a business.

The larger question is whether or not Congress REALLY, REALLY WANTS government to truly run like a business. Part of running a business is you determine which companies you will do business with and under what terms and conditions. The business, not some 3rd party, decides what part of the business will be handled internally and what parts of production/delivery will be contracted out. The business decides whether or not to continue delivery of production/services that no longer fit within the company's strategic plan.

If Federal agencies were run like a business I wonder what would happen the first time a major campaign contributor had their contract terminated because they were delivering a bloated, underperforming product/service? Would the Congress or Administration officials simply say, "that's business?"

Mmmmmm.... its a thought!

Mon, Oct 4, 2010 Kim C. U.S. Department of State

State Department's Bureau of Consular Affairs generates over $2 billion in revenue, relying on fees for visas and passports for the bulk of the bureau's operating costs. Very little is funded through appropriations. Consular Affairs is in the process of fully establishing a Comptroller's Office, responsible not just for budget, but to also align dollars to planning and performance management. We hope to apply good business and management practices seen primarily in the private sector to our somewhat unique governmental role.

Fri, Oct 1, 2010 overthink

The simplicity of the question belies the complexity of the situation. Certain federally provided functions, e.g., DoD and some critical infrastructures, can indeed benefit from some good business practices (that is just good stewardship), but in itself would become very ineffective indeed if it were to be operated as a business. Bottom line, the risk and costs associated with defending the USA for example would be way to high for a profitable business. Although such government operations don't produce a product in the traditional sense (we sure don't need the government selling hamburgers or cars!) they do a lot to enable others to create businesses that produce and increase the wealth of everyone; look at what government creation of the internet spawned.

Thu, Sep 30, 2010

Government Employees have and are asked to have a higher level of performance as Publice Servants... not as a for profit business employee.
The average taxpayer,is already being nickled and dimed into poverty with the divested and deregulated utilities... Water, Sewer, Phone/ Internet Services. Quaterly dividends are not the performance standard for continued long range planning growth.
The public had paid for this infrastructure and it all was been given away to the investors, who promptly mismanaged and profitted despite their failure.

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