By Robert E. Rubin
After a long and successful private-sector career, I came to Washington—and it made me more humble.
Hours after Bill Clinton’s inauguration in 1993, I was walking down a street in Washington with a fellow member of the incoming administration. I had just left my role as co-senior partner of Goldman Sachs to be the president’s economic adviser. My new colleague had similarly left the private sector for government. More than three decades later, I remember him saying something like this:
“We can show Washington how we did things in New York.”
This idea—that government should be run like a business—remains a popular sentiment today. President-elect Trump has nominated many senior executives who are, just as I was, entering the public sector for the first time. Mr. Trump also has outside advisers who, while not stepping down from their companies, are poised to play a highly influential role in government.
I know firsthand that a business perspective can be helpful for those serving in government. During my time at the White House, and later as Treasury secretary, I often benefited from my experience with markets—experience that a career public servant wouldn’t have.
But there were many consequential questions I encountered in government that I never had to consider at a firm. How does one prepare an options memo for the president? Or negotiate with Congress? Or coordinate with cabinet agencies?
Similarly, while I knew a great deal about investment banking and had been involved in politics since 1972, there were many areas of economic policy about which I knew little. I often had to turn to highly capable career civil servants (as well as political appointees with prior public-sector service) for information.
My advice to those new in government work is to approach the job with modesty. While government can benefit from a business perspective, government can’t and shouldn’t be run like a business. This is in part because government work requires skills and knowledge one doesn’t acquire in business.
But also, importantly, there are at least three fundamental differences between private- and public-sector management:
First, the private sector’s mission is far simpler. While every company functions differently, businesses share the overarching goal of strong profitability over time. That focus is fundamental to our market economy. In government, however, there are always competing concerns, interests and ideologies. One idea isn’t inherently worthier than the other. Early in the Clinton administration, I told Paul Begala, a senior political adviser, that I believed effective government was critical to our country’s future. He replied, “Effective government in pursuit of what?” Public-sector leaders have to define, balance and set priorities among different missions in ways private-sector leaders don’t.
In my experience, business leaders don’t always appreciate this reality. When I was at Treasury, I met with the CEO of a major industrial company who was advocating legislation he thought would be economically constructive. I told him that I agreed with him but there was strong opposition from environmental groups, and the administration would likely need to compromise. “This is exactly what’s wrong with Washington,” he said. “You compromise for political reasons.” He had it wrong. In government, there are multiple important and competing objectives, and compromise is essential to achieving them.
Second, in the private sector, decision-making tends to be centralized with a CEO. Businesspeople have to seek buy-in from others, but they’re generally accustomed to being in charge. By contrast, senior leaders in the public sector often must make large adjustments to accommodate someone else’s priorities. This is always true for cabinet secretaries, who serve at the pleasure of the president, but it’s true for presidents too. Even when the president’s party controls both chambers of Congress, senators and representatives are independent actors. Then there is the constellation of cabinet members, outside interest groups, think tanks, White House staff and lobbyists, who all must be persuaded to work together.
Third, public-sector leaders face far more scrutiny than business leaders. Business leaders deal with the press, including social media, in ways that can be both important and excruciating. The difference in degree is so large as to constitute a difference in kind.
I was fortunate to have savvy communications people around me during my time in government who helped me express what I wanted to convey while avoiding trouble. Even so, I spent far more time thinking about messaging than ever before. While businesses face competition in the marketplace, in government everything you do may be attacked by political opponents in untrue, sensational and sometimes personal ways. While this feature of politics may be unfortunate and unsavory, it’s also largely unavoidable.
I don’t point out these differences to discourage people in the private sector from taking on government jobs. On the contrary, spending time in the public sector can be personally fulfilling and beneficial for America. More than a quarter-century after returning to the business world, I strongly recommend public service to anyone given the opportunity.
I also recommend that outsiders arriving in Washington recognize how much they don’t know about government and how different it can be from business. The best way to make a successful transition to the public sector is to do so with humility. The alternative, in many cases, is to have humility thrust upon you.
Mr. Rubin, a senior counselor at Centerview Partners, served as US Treasury Secretary. 1995-1999.
