COLUMN ONE : CEOs Learn the Bottom Line of Public Life : Orange County’s Popejoy is the latest to find that the move from the executive suite to government can have its downside.

William J. Popejoy waited alone in the back hallway like an insolent child who had just been scolded by an angry nanny.

The millionaire former banker had spent an hour being dressed down by the same people who had hired him five months earlier as bankrupt Orange County’s corporate savior. When county supervisors ordered their first-ever chief executive officer to wait outside while they debated how to tell the media they had reasserted control over the county, a humiliated Popejoy knew it was time to go home.

He may have successfully climbed corporate ladders at eight companies, but in Orange County Popejoy found the one corporation he couldn’t manage. He had swung in like Indiana Jones to the rescue, never imagining that travel from the boardroom to the halls of bureaucracy could be so hazardous.

“Going into government is like teasing a cobra,” he said in an interview. “You only need to miss once.”

Popejoy is just the latest in a string of high-powered business leaders who offered their services to the public sector, only to discover that running a government more like a business can have its dangers.

America increasingly has sought business giants as leaders as economic problems have dominated the country’s concerns in recent decades. Buoyed by a wave of conservatism, voters often have favored outsiders to clean up perceived government gridlock and excess.

While some, such as Mayors Richard Riordan of Los Angeles and Bob Lanier of Houston, have been praised for their economic achievements, many savvy executives have turned out not to be well-suited to getting government back on track.

The corporate personality--used to having commands obeyed quickly and having financial incentives to motivate and to measure success--can become frustrated by government’s lengthy approval process, experts said.

Many question whether business people belong in government at all, believing that an inclusionary democratic process has little need for those executives with a bottom-line mentality who lack the values of public service and don’t respect, or include, all views.

“Top business officials have a very mixed record in government and not on the whole positive--go figure,” said Warren Bennis, a business professor at USC and author of a number of books on leadership. “Their success depends on what other skills they bring.”

Renewing Government

A nation founded by businessmen, America has a long history of corporate ties to government, including such businessmen-turned-presidents as Harry S. Truman and George Bush. Increasingly, the government has called on special commissions made up of business people, such as President Ronald Reagan’s Grace Commission in the 1980s, and requested studies by private firms.

Now, in the 1990s, “renewing” or “reinventing” government on a more corporate model has become the rallying cry. Some say ineffective governments, like badly managed corporations, need only to be restructured and whipped into shape by a strong CEO.

Still, there are some corporate leaders who go into government only to flounder and sometimes fail.

* Roger Johnson, who turned a fledgling computer company into a Fortune 500 firm, was almost run out of Washington last year after his expense reports attracted scrutiny and his cost-cutting moves at the General Services Administration made him enemies.

* Former computer whiz John A. Rollwagen withdrew as President Clinton’s nominee for deputy secretary of commerce after four months with the comment: “It was as if I were trying to grow gills.”

* And most recently UCLA professor William Ouchi, a business theorist who wrote such highly acclaimed business books as “Theory Z,” resigned after two years as chief of staff under Mayor Riordan with the words: “I knew nothing about government.”

“There is the terribly naive expectation by private sector officials that governments can be managed rationally,” said Ted Gaebler, author of “Reinventing Governments: In Search of Excellence in the Public Sector.” “It just can’t be done. And, as a result, many business folks eventually skedaddle back to their boardrooms.”

Patience Required

And with good reason.

It’s no easy feat to come from a world where you say, “Make it so,” to one where you must spend hours “building consensus.” While corporate decisions can be made quickly, often behind closed doors, implementing ideas in the public sector takes patience.

But business people bring a fresh look, new operating procedures and new strategies that are badly needed, some say. Also, many executives, having already made millions in the private sector and wanting to make a difference in government, will work for a nominal fee, like Popejoy and Riordan.

However, Gaebler and others argue that business people often have an inflated view of the impact they can make on government, tend to be arrogant and often operate on a short fuse.

Many become frustrated by the lack of clear-cut objectives: In business the goal is to make a profit. But in government, success is hard to measure.

Even the language of government can leave an executive tongue-tied. Popejoy made well-publicized blunders, such as calling county vehicles “company cars” and the Board of Supervisors the “board of directors.” The former banker also confused the AIT--an agenda item transmittal, which is used to put items on the Board of Supervisors’ agenda--with the AITD, an “all-inclusive trust deed.”

The political world “is truly a foreign culture with a foreign language,” admitted Popejoy. “I hadn’t expected that.”

The successful executive-turned-government-official must be able to learn. To show how different personalities can adapt to the public sector, Bennis compared current U.S. Treasury Secretary Robert E. Rubin with his Carter Administration predecessor Michael Blumenthal.

Rubin, a former co-chairman of Goldman Sachs & Co., helped manage the Mexican peso crisis and has proposed ways to stabilize the international economy. He has been singled out for his ability to meld different approaches and views inside Washington.

The outspoken Blumenthal, a former Bendix Corp. executive, annoyed the Carter White House by preempting the President on key issues and by making such gaffes as candidly admitting that “we screwed up” in making inflation forecasts for 1979 that were far below the actual results.

“Here are two very able people, both extremely bright,” said Bennis. “One, Rubin, seemed to understand the social etiquette of bureaucracy, had patience and was comfortable with the media and a complex, noisy group of stake-holders. The other couldn’t adapt and was basically asked to resign.”

Trouble Spots

Other trouble spots for executives include trying to build support for ideas amid such a “noisy group of stake-holders,” the lack of urgency in decision-making and dealing with the media.

Also, without big bonuses or stock options, executives-turned-government officials find it hard to reward top performers.

State Controller Kathleen Connell, who once ran her own investment banking firm in Los Angeles, is trying to bring businesslike efficiency to Sacramento. Connell, who hired a major accounting firm to complete a performance-based audit of her department, has introduced a bill to audit other departments. But increasingly some of the departments are signaling opposition to the plan, saying they want to do the audits internally.

“I really see the state as a Fortune 500 company and I am the chief financial officer,” she said. “It can be frustrating--I bring a sense of time urgency from the investment business,” which is missing in government.

But business experts shouldn’t think they have all the answers, she said.

“Business people need to mellow out a little bit,” said Connell. “You have to be willing to listen to views that aren’t as well formed as they would be in the corporate sector, because this is an open process. There is a tremendous value in this.”

Butting Heads

Popejoy knows all too well what it’s like to listen to views that aren’t quite fully baked.

Hired with considerable fanfare in February, the retired Newport Beach executive spent much of his time in county public meetings that resembled a bizarre circus--the genteel executive said he was once even manhandled by an angry tax foe.

He was called “No Joy Popejoy” and “Knee-Jerk Popejoy” by some county workers who disliked his headstrong style and budget slashing. The banking giant who steadied troubled American Savings & Loan acknowledged that he made enemies when he eliminated employees’ much coveted four-day workweeks and held the first-ever auction of county property.

Chosen by supervisors who liked his “head-on approach” and corporate experience, Popejoy quickly took charge of a county in crisis, using his expanded powers as CEO to fire top workers, slash the discretionary spending budget by more than 40% and lay off or eliminate the vacant positions of nearly 1,000 workers.

Eventually, though, supervisors and Popejoy spent most of their time butting heads. After a series of bitter, public power struggles, the supervisors forced his resignation last month after citing--as another example of his determination to do things his own way--his support for a tax increase rejected by voters.

In the end they hired one of their own, airport Director Jan Mittermeier, a 21-year county employee comfortable with the etiquette of county politics, a consummate county insider with a low-key management style.

“Popejoy took a job with the wrong company,” said Jon P. Goodman, a professor at USC. “He ran into buzz saws because he actually thought they hired him to do what they said they hired him to do.”

Now, Popejoy, 56, who has returned to retirement, is drafting a ballot initiative to put before voters next year. If approved it would transform what he called Orange County’s “dysfunctional” government into a more corporate structure, with five part-time supervisors and one all-powerful CEO.

“It won’t be easy, but things are going to have to change,” he said. “It’s going to happen county by county throughout the state.”

‘No One to Talk To’

In the federal bureaucracy, Johnson, the former chief of Irvine’s Western Digital Corp., is trying to make similar changes.

Tapped by President Clinton in 1993 to streamline the bureaucratic backwater of the General Services Administration, Johnson got off to a rocky start.

One of the highest-ranking Republicans in the Clinton Administration, Johnson was criticized last year for mixing personal and government expenses. Several internal investigations concluded that he owed the government $72 mostly due to his “unfamiliarity with official travel rules.” He was also ordered to repay the government $256.73 for 184 long-distance phone calls and several pieces of overnight mail.

At the time, Johnson spokesman Hap Conners described the travel expenses scrutiny as an attempt to discredit Johnson over his efforts to streamline the GSA, the federal government’s supply warehouse and purchaser.

Conners added that Johnson’s expense mistakes “resulted from a lack of understanding about GSA regulations, as opposed to those in the private sector.”

But Johnson now wants Clinton to draft a presidential order that would bring 50 more CEOs to Washington to fill jobs specifically identified for them.

“We need more business influence here. I’m the only one and I have no one to talk to,” said Johnson. “It’s a different world.”

Mission Statements

Although some might disagree with his politics, many business experts laud Riordan, a former Los Angeles lawyer, for successfully implementing a more businesslike management style since he was elected mayor in 1993.

Riordan is one former executive who complains that government needs to be allowed to fail sometimes to be successful. A longtime back room operator and problem solver, he wants more business people to try to change government.

“In government there is too much talk about process and not enough talk about results,” he said.

Riordan has introduced mission statements, a common corporate practice, for various departments; merit pay for department heads, and other evaluations for city departments. He also took top workers on a weekend retreat to San Pedro to learn management techniques. “For a business person to be successful, you need to be able to be a problem solver and have a mania for implementation and then meet with the best political minds you can find. Then listen to them,” he said.

Houston Mayor Lanier believes more mayors need to adopt a CEO attitude, although he doesn’t think politics is for all business leaders.

“You’ve got to take a lot of flak if you get in this line of work,” said Lanier, a former developer credited with revitalizing the Houston economy and reducing crime.

While he thinks government would be better served by broader business participation, executives need “other skills” than business skills to be successful there, he said. One of the most important is communicating with the public.

“You have to be able to translate your program through the media to the public in a critical climate--something business people are not used to,” he said.

The Human Side

But despite the need for change, some doubt whether executives can ever adapt to the public sector. They question whether, with the increasingly diverse and changing demographics of California, business leaders have what it takes to manage such a diverse state.

“It’s dangerous because these kind of people can come in without experience considering the human side to issues,” said Felix Delatorre, state policy analyst for the Mexican-American Legal Defense and Education Fund in Sacramento. “They are used to considering the hard facts like how much money does it make.”

As an example, Delatorre said, a mayor might be attracted to a plan to save taxpayers money without putting an equal priority on what happens to the people who are put out of work.

Hiring more executives might bring a “cold, sterile style to the way we run our agencies,” he said. Ultimately, even Popejoy, after his tumultuous five months in office, thinks injecting business practices into government is the last hope for controlling a mushrooming bureaucracy.

“Even after everything, I still think government can be run more like a business,” said Popejoy. “It must be run more like a business or it will overwhelm us.”