A crisis of competence

At the end of last year, I had asked one of the ‘human capital’ gurus in my office if she had ever encountered a book or essay that discusses which trait—loyalty or competence—is most valuable to a manager or executive in his or her direct reports. And more to the point, which trait is more valuable in a ‘change environment’ or turnaround. For example, let’s suppose you have taken over the failing advertising division of a large packaged food company. In deciding who to fire and who to retain, should you choose to keep those folks who seem most amenable to your vision of the future, or should you keep those who are truly outstanding at what they do, even if they have reservations about you and your plans? Although she didn’t have any relevant literature to pass along, she did say that most management folks take it as an article of faith that good leaders surround themselves with competent people over and above loyal ones. (Note here, for the purposes of discussion, I am not assuming that those competent people are necessarily treacherous, but merely suspicious or skeptical—and possibly obstructionist.)

I’ve had cause as a consultant in the business world to consider such things and can see the value of both traits, when deployed in the appropriate places at the appropriate times. On balance, micro-managers tend to favor loyalty; they don’t expect their people to do much anyway but carry out instructions to a T and often, even then, do much of the work themselves. The absentee manager or executive tends to favor competence for obvious reasons. If you’re going to check out, certainly it’s best to leave behind competent people to keep things running.

While I’ve thought about this choice as it applies to business organizations for some time, I’ve only recently been thinking of how it might apply to political administrations. Obviously, a good number of political appointments are ‘pre-determined.’ That is, many functionaries within government—from commission chairs to ambassadors—are so-called political appointments that go to fat-cat donors or to loyal party apparatchiks, regardless of the appointee’s capabilities. Now, appointing a quail-hunting buddy as Ambassador to Belize won’t likely upset the apple cart; however, there is a real potential of shooting oneself in the foot when you begin naming inexperienced cronies to important posts.

With the bungling of the federal government’s preparation and response to Hurricane Katrina, Michael Brown has become a recent and notable example of this. Brown was elevated to the directorship after Joe Allbaugh, Bush’s first FEMA director, resigned to enter private business (and what a business—The Allbaugh Company has reportedly won contracts to help rebuild New Orleans—oh, the irony). Allbaugh and Brown were schoolboy friends, it seems, and since Allbaugh was Bush’s 2000 campaign manager and Governor Bush’s chief of staff, well, you can see how the wheels get greased.

It is unfortunate that it took a tragedy like Hurricane Katrina to throw the spotlight on FEMA, but FEMA does provide an excellent case study in helping us resolve our loyalty v. competence quandary. It was another hurricane—Andrew in 1992—that prompted Congress to call FEMA ‘a political dumping ground’ filled with political appointments. On the surface, President Clinton did no better in filling FEMA’s directorship, appointing James Lee Witt, an Arkansas Democrat, to the post, but what Clinton got was a capable administrator who quickly turned FEMA around and made it into a model government agency. Was Clinton lucky? Perhaps. Witt proved both competent and loyal, but most importantly, Witt was the first FEMA director to have led a state-level emergency preparedness and management agency prior to coming to Washington. If Witt was a political appointment, at least Clinton chose to put the round peg into the round hole.

With Bush’s appointing of Allbaugh and then Brown, FEMA reverted to form and became once again a political dumping ground. If FEMA’s post-Katrina troubles were merely an isolated example of incompetence, one could discount it, but even devoted right-wingers must sigh at the list of bureaucratic failures of the Bush Administration and its attitude of ‘Don’t Sweat the Big Stuff’, from misguided pre-war intelligence on Iraq to the recent miscalculations regarding the DP World transaction. To be fair, not all these misfires are the result of choosing loyalty over competence (after all, Bush inherited George Tenet, the former CIA director, from the Clinton Administration); however, Bush has chosen to expend quite a bit of political capital on either nominating incompetents or attempting to protect them after they have failed.

In defending the Bush Administration’s track record of appointments, one might point to Ben Benanke, Alan Greenspan’s successor as Fed Chairman, as an example of getting it right, and Bernanke, while many disagree with his views on monetary policy, was surely as credentialed as they come. But then there was Mr. Bush’s appointment of Kevin Warsh, whom The Economist labeled a ‘shockingly lightweight appointment,’ as a Member on the Board of Governors of the Federal Reserve System for the 2nd District on January 27. Mr. Warsh, a former investment banker with Morgan Stanley and White House aide working on domestic finance (and we all know how well that’s gone in the last six years), lacks any substantive central banking experience whatsoever.

Think, too, of Hariet Miers, Bush’s ill-fated Supreme Court justice nominee, whose chief qualification for the Supreme Court was her serving Mr. Bush as White House Counsel. Without heaping calumny upon Ms. Miers, who is by all accounts a very smart lady, one finds distasteful the audacity of such a nomination, for in order to stomach it, you had to believe in your heart of hearts that the former chairwoman of the Texas Lottery Commission was the best choice for such an august appointment.

And then there’s John R. Bolton, Bush’s choice to serve as U.S. Ambassador to the United Nations. Few men are smarter or more well-informed than Mr. Bolton, but his style and manner is more suggestive of a defense minister, not an ambassador. Mr. Bolton was a so-called ‘recess appointment,’ a Constitutionally granted executive power that allows vacancies to be filled temporarily without Senate approval, and given the number of enemies Mr. Bolton has created over the years on Capitol Hill, it was probably the only way he could have assumed his current post. Mr. Bolton’s judgments are often correct, but his zeal, vanity, and utter disregard for process make him an unwise choice.

From the earliest days of the republic, presidents have stacked the bureaucratic deck with political appointees. In fact, one could argue that, 150 years ago, the type of petty corruption resulting from appointments was about the same as it is now. Literary history has rescued one such instance; take the case of novelist Nathaniel Hawthorne, who labored intensely on behalf of President Franklin Pierce in the 1850s, writing his campaign biography, which at that time, served the same purpose as today’s maudlin TV spots or those corny biographical videos played at the national conventions, such as ‘The Man from Hope.’ As a result of his devotion to his old school chum, Hawthorne was given the lucrative appointment of the consulship of Liverpool, a position that lifted Hawthorne out of borderline penury and enabled him to travel the European continent (eventually resulting in the writing of The Marble Faun). Pierce could have given Hawthorne any number of posts, but by dispatching him to Liverpool, he gave Hawthorne one of the plum appointments of the administration. Hawthorne, a man who could scarcely manage his own family’s finances, was made the chief representative in Liverpool of US commercial interests. When you consider the immensity of the commerce conducted between the city of Liverpool and the US (particularly southern cotton), it becomes clear how ill-suited Hawthorne was, as well as how lucrative the post was.

Dig a little deeper into the annals of political appointments and you’ll discover a, um, ‘rich’ history of presidential gift-giving, from Andrew Jackson’s introduction of the ‘spoils system’ of federal appointments to Franklin Roosevelt’s attempt to stack the Supreme Court by enlarging it to 15 justices.

It is worth noting that Pierce, a man who was fervently loyal to his friends, has gone down in history as one of our worst presidents (although that might have as much to do with his post-presidential career as a drunkard and southern sympathizer during the Civil War). It makes one wonder what future historians will make of this current president, who has similarly demonstrated a high degree of loyalty to his cronies, even when they are clearly in over their heads.