Government can learn a lot from business. Most private companies get their revenue primarily from customers so responsiveness is not an option. Keeping customers happy and cutting expenses are essential. Continuous improvement is the norm. Consider the case of McDonald’s.
During the last decade, McDonald’s added a lot of new products, including oatmeal, snack wraps, and lattes. The company doesn’t release specific data, but one estimate identified an increase in the total number of offerings from 85 to 121 between 2007 and 2014. Each new product was intended to expand service. Who can argue with more choices?
There was a problem with this approach. Each new product required a new station for preparation, new training procedures, and additional labor. Collectively, these changes broaden the responsibilities of employees, crowd the food preparation area, increase inventories, lengthen waiting times, and raise costs, all of which have hurt the company’s ability to deliver Big Macs, fries, shakes, and other staples. Rivals like Five Guys, Chick-Fil-A, and Chipotle Mexican Grill are smaller and more focused, and have lured many customers away. As a result, McDonald’s just experienced the sharpest decline in same-store sales in 14 years.
There’s a simple lesson here for business: Sometimes less is more. But government can learn from McDonald’s as well. The Constitution underscored the notion of limited government, giving Washington certain, specific responsibilities. As stated in the tenth amendment: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. Sticking to a short list was intended to keep Washington focused and responsive. A government involved in fewer activities should have an easier time keeping its eye on the ball and doing those activities reasonably well.
Like McDonald’s, governments at all levels—especially in Washington—have expanded their reach over the years. Amidst the massive continuing resolutions required to keep the behemoth moving, government waste and cronyism have soared to an all-time high. McDonald’s responded to its crisis by announcing the elimination of eight menu items—about 7% of the total. More might follow, but eight is a start. With an $18 trillion nation debt, why can’t Washington take similar action and eliminate 7% of its spending?
Some will disagree; I’ve heard the rejoinder many times: “You can’t compare government to business because you can’t run government like a business.” There are certainly differences, but the principles associated with managing both entities effectively are quite similar. Besides, if you don’t run government like a business, then how do you run it?