Published August 2001

Be honest about what can, can’t be cut from budget

The U.S. Coast Guard’s Latin motto is “Semper Paratus” — always ready — and the organization has always taken great pride in being just that. It always stood ready to rescue mariners in distress, intercept drug smugglers, clean up maritime spills and take on any of the other diverse jobs here and around the world assigned to it by the Congress and the president. Now, however, the Coast Guard needs a new motto — whatever the Latin is for “falling apart.”

Its small fleet of ships is so old, on average, that it places the service perilously close to the bottom of the list of the world’s 40 or so maritime services. Major parts routinely fall off these ships — at the worst possible times.

Cutbacks in staffing and training threaten the human side of readiness. Rescue situations are inherently dangerous. Sending unskilled people out on a rescue mission creates an additional hazard; they are a menace to their own safety as well as that of those already in need of assistance.

The Coast Guard is in such a state that one senior admiral was quoted just last year as saying, “We’re almost ready to declare bankruptcy.”

How did this happen? The Coast Guard has many friends and no known enemies in Congress or elsewhere, so how could they be underfunded?

The answer is that it was what police detectives call “an inside job” — a major management failure. The way in which it happened, though, is of interest to us all because it shows that it isn’t just our faults and shortcomings that plague us. Sometimes, in the right circumstances, even our positive characteristics can get in the way of good management.

What happened to the Coast Guard is that its “can do” spirit simply got out of hand.

Over the past years, especially during the 1990s, it was very fashionable for the federal government to claim that it was shrinking the size of government and cutting the budget accordingly. In the aggregate, the rhetoric of this always exceeds the reality, but for individual government agencies, the budget cuts could be painfully real.

This was especially true for those agencies that weren’t good at the budget process — a game in which Congress rewards those who whine the most or can successfully evoke the idea that disaster will strike if they don’t get their money. By contrast, it ignores organizations like the Coast Guard, which, because of some ill-advised combination of stoicism and “can do” spirit, accept their budget cuts and don’t complain.

This can bear a striking resemblance to how budget decisions are made in private enterprise. In the current economic climate, for example, it isn’t uncommon for a CEO to announce that expenses have to be cut by, say, 15 percent.

The management problem is when to be a “team player” vs. when to tell the CEO that you can’t do it without jeopardizing critical functions.

To some people, saying “can’t” to the boss sounds like a career-limiting move. It rarely is, though, for the fundamental reason that the CEO does not know the details of the organization’s operations and where the limits of those operations might be.

CEOs depend on people like you for that information and that judgment. (Even on the Enterprise, Capt. Kirk, who liked to push Scotty and his power plant to the limit, would defer to the engineer’s judgment when the mission was at stake.)

And while it may seem easier to respond with a “can do” to the budget cut, your uncritical acceptance will not ultimately help you. No one will thank you if your prime responsibility, the computer system, crashes for lack of maintenance.

In management, there is no substitute for knowing what you are doing — and what it costs. And when things get tough, that knowledge is exactly what CEOs want and need.

Don’t be afraid to use it.

James McCusker, a Bothell economist, educator and small-business consultant, writes “Your Business” in The Herald each Sunday. He can be reached by sending e-mail to otisrep@aol.com.

Back to the top/August 2001 Main Menu