How to destroy a business - or a government

Some years ago, a business colleague in Columbus, OH explained to me how he nearly lost his business. I'll bend the details (to protect the well-meaning, though not innocent). His company was moving. Taking care of customers; taking care of employees; making money.

Then, one day, one department head wants to talk to the owner. He reports that everything is great in his department. They are turning out their work, employees are happy, all is well... except for one small problem: that pesky telephone.

Fielding all those phone calls is interrupting staff. If we could just hire someone to handle the telephone, sort the calls to insure the  important ones were properly handled, it would be a great help.

A person was hired to handle the department telephone traffic. Payroll was increased. Profit was not.

A second department head wanted a talk with the boss. His department is doing fine, he brags. They are turning out the work, everyone is happy... except for one small problem: that pesky data entry.

Taking time to do all that data entry was eating into important staff member's time. If we could just hire a young computer keyboard whiz to handle the data entry, it would be a great help.

A person was hired to do data entry. Payroll increased. Profit did not.

A third department head wanted to see the boss. His department is doing great, turning out the work, everyone's happy... except for one small problem: pickup and delivery. Having to drop everything to make a delivery, or pick up some needed item was cutting into skilled workers time. Could we hire someone to handle all that go-fer stuff?

A person is hired, a vehicle purchased. Payroll and expenses increased. Profit did not.

This continued until my friend realized what was happening, got tough, and cut payroll to true essentials.

Years earlier, at a radio station where I worked, the station had the opportunity to interview a member of the famous DuPont family- of the giant DuPont chemical company. In discussing ways to achieve success, Mr. DuPont explained that it is okay to spend extravagantly on your home, if that will make you happy (providing you have the money to spend). But you can never do that for a business.

A business is a tool for earning a profit - while properly supporting employees and serving customers. You never make an expansion, you never hire an additional person, unless it can be shown that not doing so will cost the company money, or that doing so will increase profits.

That is why corporate C.E.O.s are highly paid. They know how to follow this rule, no matter how large the company... an extremely difficult task.

The same scenario happens in government, except that there is never a C.E.O. to rein in the waste. After all, government is always supported with other peoples' money, and profit is never a concern.

When we talk about smaller government, we are wishing for a C.E.O. who will attend to properly supporting employees and serving customers (taxpayers), while eliminating everything else. Not a huge demand. Not a job for a likeable but unskilled C.E.O.