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Leadership from the bottom line

Leadership from the bottom line

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Business bashing seems to be the political currency of the realm these days. Popular targets are typically labeled as “obscene profits” or “unfair tax breaks.”

Although some corporate executives have, indeed, abused their power, the reality is that the vast majority of employees and managers — the working stiffs of both the large and small business world — are struggling to survive. In the process, they are doing some things that can serve as important lessons for our elected public servants and for us, their taxpayer bosses. The top three:

1. Balancing expenses with revenue.

In the business world it is, in the vernacular, a “no brainer.” Simply stated, if you don’t make more than you spend, you go broke. In the governmental system, it’s not so simple. The primary source of revenue is taxes. Our city and county elected representatives want to stay that way — elected — and are averse to raising taxes, particularly the property variety. Our Guilford County commissioners did, in an uncharacteristically bipartisan action, put a sales tax increase on the November ballot and it was defeated.

As the Pogo comic strip aptly put it, “We have met the enemy and he is us.” To reverse President Barack Obama’s rallying cry: No we can’t. In today’s economy, we can’t expect the same services without paying the price. It just doesn’t compute.

A compounding factor is that there is a cultural gap between those who work in for-profit business enterprises and state and local government employees. Most managers in business organizations clearly understand the need to take the necessary actions, however unpleasant, to balance expenses with revenues.

Government employees are no less talented or dedicated but are much more isolated from economic realities and influenced by political pressures and bureaucratic barriers. There also is more incentive to hunker down in the trenches and hope things get better.

On average, state and local government employees make more money and have substantially better benefits than those in the private sector. A recent Bureau of Economic Analysis/USA Today report indicated that public workers earn more than their private colleagues in 41 states. In North Carolina, the difference was $1,857 per year.

2. Consolidating and merging for shareholder value.

Business organizations engage in mergers to increase market share and increase efficiency. These are usually painful, often involve layoffs and loss of status to one of the merging entities, but ultimately tend to provide more value to the shareholders. In our city and county the taxpayers are the shareholders and, if we objectively review the services we receive from Guilford County and the city of Greensboro, we can find numerous opportunities to reduce overlapping functions, and to increase efficiency and our own shareholder value.

Merging city and county services requires the courage and tenacity to overcome entrenched political interests, provincial perspectives and bruised egos. But, overcoming them is the price we must pay for efficiency and, in business terms, “get the most bang for the buck.” To straighten out the previous reversal of Obama’s rallying cry, “Yes we can”; but the underlying question is, do we have the energy, courage and leadership to make it happen?

3. Intolerance of poor performers and non-team players.

Economic conditions have forced business organizations to become leaner and often meaner. They have little tolerance for poor performers or those who are unable or unwilling to facilitate and participate in a team environment. The best have found that teamwork and respect for alternative perspectives result in better decisions and provide the fastest route to recovery.

Effective teamwork is not a hallmark of our Guilford County commissioners. This is a basic historical flaw in the organizational culture and is fueled by partisan divisiveness, mistrust and decisions by deal-making as opposed to collaboration and teamwork. If our county board was part of a responsible business organization, the culture would change or heads would roll.

There is a difference between groups and teams. Teams achieve synergy and have unifying cultures while groups do not. Although divided into opposing political camps, Greensboro City Council members tend to work as an effective group and demonstrate the potential for becoming a team.

There are obvious structural differences between business and political organizations. Although many business organizations have social and environmental agendas, in today’s economy the primary objective is the bottom line (financial profit).

The bottom line for council members or county commissioners is more complicated. There are multiple constituencies and conflicting political values. Democracy is by nature messy, and decision-making is a fragmented process.

Nonetheless, if our city and county are to thrive in today’s economy, we all — taxpayer shareholders and elected representatives — need to pay attention to the lessons of successful businesses. We need to bring in more money than we spend, consolidate overlapping functions, rid ourselves of poor performers, and facilitate productive teamwork.

If we don’t heed these lessons, we may not go out of business, but we will end up living in the equivalent of a Third World country. That’s not the future any of us wants for Greensboro or Guilford County.

David Noer ( writes a monthly column about community, leadership and organizational behavior.


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