THE APPOINTMENT OF LUIS RAMIREZ as the new general manager of the MBTA again raises the question of whether a successful private sector businessman or woman can make a successful transition to the public sector.
One school of thought, usually offered by those with limited public sector experience, argues that proven business leaders can simply transfer their management skills to government where they are sorely needed. At the other end of the spectrum are those, including public sector unions, who contend that the values and challenges of the two worlds are so different that the skills are not transferable.
There is some reality in both views though both are, of course, exaggerated. However, it is too simple and not helpful to conclude that the truth lies at some midpoint between the two extremes.
The case of the last two governors is illustrative. Mitt Romney had no government experience, except very tangentially when he took over the 2002 Winter Olympics. Deval Patrick had a brief stint in Washington but his career was as a lawyer not a public sector manager.
Both men struggled to implement their agendas. Both viewed the governor as a CEO, not understanding or appreciating the role of the Legislature and the inherent limits of gubernatorial power in our democracy. To be sure, both adjusted their expectations while in office, but their lack of government experience was a significant liability that neither one fully overcame.
Charlie Baker, on the other hand, brought to the governor’s office more high level government experience than any Massachusetts governor in memory, and likely more than any other governor in the nation. Under former governors William Weld and Paul Cellucci, Baker ran the state’s largest secretariat (the Executive Office of Health and Human Services) and its most far reaching (the Executive Office of Administration and Finance). As governor, he has developed close relations with the Legislature (as another Republican Frank Sargent did 50 years ago) and has quietly cleaned up many of the management problems he inherited from Patrick.
Of course, Baker also led the successful turnaround of Harvard Pilgrim Health Care, demonstrating that some individuals can be successful leaders in both the public and private worlds.
Baker’s experience at Harvard Pilgrim may have played a role in the selection of Ramirez, who was lauded by the administration as a turnaround specialist. And, of course, despite all the good work of the T’s Fiscal and Management Control Board, the MBTA is a quintessential candidate for a turnaround. Nevertheless, the decades-long problems confronting Ramirez at the T will dwarf anything he has dealt with in his career.
Independent legislators, public sector unions, inflexible work rules, limited resources, media scrutiny, constituent pressures, advocacy groups, a charged political environment — these and other factors will all be new to Ramirez.
Leadership is a rare quality in either the public or private sectors. But in my experience in senior roles in both government and business, the challenges facing public sector managers are greater, and require more diverse talents, than those confronting private sector managers.
WBUR’s story on Ramirez’s issues at Global Power Equipment Group give one pause. His lack of public sector experience is an even more serious concern.
The citizens of the Commonwealth have a lot riding (no pun intended) on his success, and we all wish him well. But if he makes a successful transition to running a very complex and politicized government agency, he will be the exception not the rule.
Michael Widmer is the former president of the Massachusets Taxpayers Foundation and a member of the board of the Massachusetts Health and Hospital Association.
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Yeah, the problem with the MBTA’s new general manager is his lack of experience in the public sector not the fact he “resigned suddenly” from his most recent position, “shortly after his resignation” the company said it had “misreported financial statements due to accounting errors” and the new he “is among several current and former… executives named as defendants in investor lawsuits over the accounting problems” per The Boston Globe.
No argument, the notion that managerial skills are transferable between the public and private sector has long had its critics.
At the same time and for but one example, former senior military officers have at least arguably decent records moving onto senior private sector gigs as well as at other public sector posts and even elected office.
Ultimately, what is key is a good fit by the person hired or appointed to the plans and needs of the entity.
That and the plans are sound.
So far, however, we are far from knowing just exactly what are the plans for reforming the T and thus outside observers are putting Ramirez’s hiring before the cart.
That and how it is only fair to point out that the last permanent head of the T came to the T with purportedly solid public transit management experience as well as that various prior heads of the T weren’t exactly aces either.
No argument, running a complex organization such as a transit system is a tough slog, but it can and must be done. https://uploads.disquscdn.com/images/605292f7aee2f6398ddc0b5fd0eaec9e9f6428ea002bab7760cb45c5bfb7a9aa.jpg
LOL! Today’s WBUR has a story “The Incoming MBTA GM’s Former Company May Face Bankruptcy,” reporting: “Global Power Equipment Group, the corporation run previously by incoming MBTA General Manager Luis Ramirez, has had to sell off assets, lay off employees, and risks declaring bankruptcy as a result of erroneous financial statements it filed with federal regulators while Ramirez was CEO.” LOL! So he didn’t turn around the private sector company but still Governor Charlie Baker wants him to be the one to turn around the MBTA. Here’s Governor Baker’s quote: “We believe his body of work is exactly what the T needs. I have no doubt that when we have this conversation a year from now, most other people will agree with me.” So no private sector success and no transferrable skills. Great…just great.
“What went wrong at the new MBTA boss’s old job?” is an 8/22/2017 Boston Globe article worth reading. Here’s an excerpt:
One of Global Power’s longtime shareholders, Nelson Obus of Wynnefield Capital, remembered meeting with Ramirez after he was named chief executive in June 2012, and said he wasn’t impressed. Fresh off a dozen years at GE, Ramirez used too many buzzwords for Obus’s liking. “We met Luis in our conference room and my impression of him was that he was very promotional and superficial,” Obus said in an interview Tuesday. After meeting Ramirez, Obus said he sold his company’s remaining shares in Global Power “on the basis that I didn’t have confidence in him.”
I have to agree with you. Every leaders needs to follow the KISS rule and don’t use buzzword when talking to people. This is the reason why shareholder did not have confidence in him by selling his shares.
I am going to have a wait and see on this one because Ramirez will get baptize in dealing with many shareholders in the process that will be different from what he did as CEO. I’m not quite confident in the long run.