The Business of America

Calvin Coolidge is one of the least quoted America presidents because he was usually reluctant to say much of anything. But one thing he did say has stuck with us. “The Business of America,” said Calvin Coolidge, “is business.” His declaration epitomizes an influential school of thought which claims that business is and should be the dominant American institution. Some have proposed, in fact, that the United States government should be run like a business.

The notion that leadership in all sorts of organizations and enterprises should mimic the behavior of business leadership is rooted in the history of business itself. About 160 years ago, when large-scale formal organizations first began to appear all over the landscape, business organizations had one definite advantage over democratic governments and other multi-purpose organizations. The clear and constant discipline of the bottom line, which separates profit from loss, gave business leaders a target and a method to measure all aspects of performance. The development of management as an academic subject made its initial gains in the world of business. Nowadays management principles are taught to leaders and would-be leaders in education, religion, government, medicine, and dozens of other fields.

In times of economic recession, the pressures of budgets make the application of business methods even more logical. Ironically, the success of business management principles, the affluence produced by American business, and concern for certain side effects like environmental pollution, have given rise in some quarters to a shift in emphasis from production to service and from preoccupation with the bottom line to social responsibility. One of the most promising developments in the realm of organizations, including businesses, is the focus on the "triple bottom line:" people, profits and the planet. If Calvin Coolidge were around today, he might be tempted to revise his most famous remark. “The business of America”, he might say, “is America.”

Bureaucracy Pro and Con

The quality of leadership in any group depends an awful lot on the size and structure of the group itself. There's one kind of group, in fact, that almost seems to defy any attempt at creative leadership, and you'll hear people in government, business, education, and virtually everywhere else complain about it. It's the large, formal organization tangled in rules, regulation, and red tape. We usually call it bureaucracy

Bureaucracy is really just a fancy name for an organization so large and so specialized that it can only operate by maintaining clearly defined roles and written rules to govern all activities. The modern world does much of its work through such organizations, and without them many of the material benefits of life would be impossible. Yet they do present serious obstacles to leadership and creative innovation.

Ironically, bureaucracies have contributed to a more rapid pace of change in the modern world, but they are so large and cumbersome that they don't adapt well to change themselves. Also ironically, bureaucracies are the result of the human ability to communicate and store information in writing and other symbolic forms -- yet they also limit communication by eliminating much of the face-to-face interaction which helps people to really understand each other.

Since people can easily be treated as replaceable parts in a large bureaucracy, it can also be hard to motivate them to perform beyond minimal expectations or to take risks beyond the written rules and regulations. One of the most effective ways to make bureaucracies more responsive is to work on building small, effective teams within the organization and give each team a clear set of goals and expectations.

Individuals can't do much alone and massive bureaucracies tend to strangle in their own red tape, but small, close-knit teams communicating directly and personally can be creative and can act as flexible links between individuals and the organization as a whole. Small teams can also support a culture of collaboration between and among individuals, other teams, and the organization as a whole.