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To prepare a briefing for my public management students about the federal and Ontario budgets, I diligently scrolled through both. Two similarities became apparent.

First, both led off with good news. The federal government used the rubric of Jobs, Growth, and Long Term Prosperity, and is continuing to use the Economic Action Plan brand, over three years after it was introduced as the response to the 2008-09 financial crash and recession. Indeed, most of the document was about the government’s new spending initiatives and only in the last third are budget cuts discussed. Its spending initiatives over the next two years will total approximately $ 2 billion. We can consider them as being funded by the $ 5 billion in cuts to be achieved over the next three fiscal years. This is in keeping with my co-author Allan Blakeney’s approach of “putting government through the wringer” at the start of a new mandate so that the savings can be redeployed to new priorities.

The Ontario Budget, more ambiguously titled, “Strong Action for Ontario,” is dealing with a more challenging fiscal situation. Nonetheless, the budget led off with an affirmation that the government would not reverse its signature initiatives, such as full-day kindergarten, a reduction in class sizes in elementary school, and the 30 % tuition reduction for college and university students.

In discussing restraint, the federal government is being vague to the point of being disingenuous. Little detail is provided about many department’s cuts, and in many instances the government is claiming that they can be achieved through back-office economies, such as consolidation of support systems and improvements in IT. The implication of this claim is that standards of service to the public will not deteriorate.

The Ontario government is also somewhat vague in places, for example about how modernizing the Ontario Lotteries and Gaming Corporation and optimizing the revenue potential of the LCBO will lead to its expected revenue increases, or about how it will ratchet down the annual rate of increase in its health budget to a mere 2.1 %.

In the federal government, concerns have been raised that combining a major budget cut of $295 million for the Correctional Service of Canada and a commitment to build no new prisons with get-tough-on-crime legislation will lead to more crowding and more violence inside the prisons. Cuts to training and counseling programs inside the prisons will likely lead to increased recidivism. In two other areas facing major cuts, the CBC and External Affairs, it has become clear that there will be considerable deterioration in the nature of the outputs delivered.

Let me be clear. I am not arguing that the federal government should not be making cuts. I am rather arguing that it should not be disingenuous in claiming that all the cuts can readily be handled through the elimination of slack and increasing back-office efficiency. Some of the cuts will result in reductions in front-office service and programs, and the government should have been more transparent about that. Mr. Flaherty delivered the good news on budget day, but the bad news will be trickling out for months and even years to come.

The Harper government’s credibility in this budget is not being helped by the Auditor General’s report on the procurement of F35 fighter aircraft, in particular the implication that ministers have been knowingly using costing that is grossly underestimated.

The second similarity between the federal and Ontario budgets is that both governments will be relying on their public servants to deliver the savings. While some instruments of government, most notably communications, rely primarily upon politicians, the budget involves program delivery, and that is primarily the work of public servants. Reducing spending while maintaining capacity will depend on the public service’s sense of professionalism, willingness to go the extra mile, and capacity to innovate.

Finally, a word about the budget politics of Ontario’s minority government. The Conservatives, by staking out their position of clear and vigorous opposition to the budget, have foregone any influence over it. Their eyes are on the next election, in which they hope to position themselves as the one party unequivocally in favour of economic growth as defined by their support for reducing the corporate income tax rate, and will label the Liberals and NDP as two peas in a tax-and-spend socialist pod. The NDP doesn’t want an election, but wants to be able to tell its supporters that it improved the budget. The McGuinty Government would like to accommodate the NDP as long as it can maintain a credible fiscal framework of gradually eliminating the deficit. My expectation is that all three parties will get something from the budget debate: the Liberals and NDP a wanted deal that averts an election, and the Conservatives a platform for the next election.

Writer-director Joseph Cedar’s Academy Award-nominated film Footnote brought to mind the Swiss director Eric Rohmer’s “moral tales”: movies in which intelligent and articulate characters confront ethical dilemmas. In Footnote, Eliezer and Uriel Shkolnick are both Talmudic scholars at The Hebrew University. The son (Uriel), a far more distinguished academic than the father (Eliezer), is selected for the Israel Prize for Talmudic Studies – the highest recognition in their field. Due to an administrative error, the father is informed that he has won the prize. The adjudication committee, recognizing its mistake, consults with the son about what to do. On the basis of the son’s advice, the committee decides not to correct or admit its error, least of all to Eliezer. To avoid spoiling the movie for my readers, all I will say is that the movie presents the consequences of this decision to perpetuate a lie.

I enjoyed Footnote because it deftly mixes the comic with the tragic consequences of this lie, and I strongly recommend it, especially to academics. Two aspects of the story particularly appealed to me.

The difference between the two Professor Shkolnicks was more than generational. Eliezer Shkolnick was a rigorously scientific philologist, carefully scrutinizing minute textual inconsistencies to determine the origins and intertextual relationships of different versions of the Talmud. Uriel Shkolnick was a popularizer who interpreted Talmudic themes in a modern cultural context, a man who was quick with an opinion or a soundbite. Eliezer was a humanist-scientist; like an archeologist, he was using scientific methods to enhance our understanding of the past. Uriel was what we in North America call a “public intellectual” (a term not used in the movie, however).

One of the perpetual tensions in academe is between those who see themselves as scientists and those who see themselves as public intellectuals. Scientists are deliberate and even sometimes hesitant because they want to gather and evaluate all the data before presenting their conclusions. And the conclusions are always open to the possibility of revision on the basis of new data. Public intellectuals are good at quick pattern-recognition, and can always express themselves articulately about the latest trends in their area of expertise and its relevance to the wider society. Scientists see public intellectuals as shallow and self-aggrandizing. When I was studying economics at Harvard, one of the best-known public intellectuals in Cambridge was Lester Thurow, then dean of the Sloan School at MIT. I remember that among the scientists he was referred to as “less-than-thorough.” Public intellectuals, on the other hand, see scientists as timid, blinkered, and boring.

Footnote had two visual images that struck me as emblematic of the scientist. Eliezer Shkolnick always wore headphones when he wrote or studied, so as to shut out the outside world. His academic colleague and head of the selection committee for the Israel Prize, Yehuda Grossman, had a massive brow that was always deeply furrowed, perplexed by the puzzles he was trying to resolve.

The selection committee was where the ethical dilemma marking this moral tale began. When the committee discovered that Eliezer, rather than Uriel, had been notified, they could not decide what to do, so for some reason they consulted Uriel. As a former administrator, I think consulting Uriel was madness. Decision makers should never be in a position of conflict of interest and should recuse themselves in such situations. Consulting Uriel put him into a double conflict of interest – with respect to himself and with respect to his father. But bad administrative practice created the ethical dilemma, and hence was essential to plot development.

Uriel’s arguing that his father should nonetheless receive the prize, and the selection committee’s agreement, set in train a series of painful consequences. Without spoiling the plot, I can say that it brought conflict and sadness, rather than joy and naches, to the entire Shkolnick family and, despite the selection committee’s cover-up, the truth came out.

Mark Twain wrote that “if you tell the truth, you don’t have to remember anything.” Footnote argues that this adage applies even to what we call white lies or diplomatic lies. If these lies concern a matter of ongoing importance, they will have consequences. Lies beget cover-ups and cover-ups beget investigations and investigations beget exposes. So, for me, Joseph Cedar’s moral tale provides additional support for the hypothesis that, in academic administration as well as in research, honesty is the best policy.

Now that the semester is almost over, I will assess the two books I assigned in my capstone strategic management seminar for fourth year UTSC undergraduate management majors. The textbook was Henry Mintzberg, Bruce Ahlstrand, and Joseph Lampel’s Strategy Safari, 2nd edition (Financial Times Prentice Hall UK, 2009) and it was accompanied by Walter Kiechel’s The Lords of Strategy (Harvard Business Press, 2010). This review represents my opinion. Though I was influenced by students’ reactions to the books, I take full responsibility.

The authors of Strategy Safari, whom for brevity I will refer to by the first letter of their surnames as MAL, had a terrific idea. Strategic management is a field that tolerates a great deal of diversity in substantive focus and methodological approach. They divided the field up into 10 “schools,” or conceptual approaches, and provided a portrait of each, outlining the major authors and their works, summarizing its major assumptions, critiquing it, and then offering an assessment of its contribution. The ten schools are indeed very diverse, the set of authors surveyed for each school extensive, the critiques pointed, and the assessment of contributions usually fair-minded.

Unfortunately, there are a number of features that detract from Strategy Safari’s value as a textbook, particularly for undergraduates. MAL did not state clearly at the outset Strategy Safari’s objective or its intended readership. Because the publisher makes available an instructor’s manual and set of powerpoints, we can infer it was intended as a textbook. If undergraduates are the target audience, then MAL tried to pack too much into the treatment of every school, for example beginning the chapter on the positioning school with a nice-to-know nine page (pp. 89-97) discussion of military maxims. As a consequence the book often reads like a literature review aimed at doctoral students. MAL could have satisfied both audiences by discussing each school in terms of one or two foremost scholars (Porter representing the positioning school) in the core of each chapter and relegating the literature review to an appendix to the chapter.

A book like Strategy Safari is most effective if it illustrates the ten different schools with compelling case material. Unfortunately, the case material is often far from compelling. The major case in the instructor’s manual is “Robin Hood,” a based-on-a-true-story case about a mediaeval rebel, aimed at students who have had no prior exposure to strategy. The chapter on the entrepreneurial school, for example, incorporates Mintzberg’s studies of strategy making from the 1930s to the 1970s in Steinberg’s, a Montreal-based supermarket chain, and Canadelle, a Montreal-based manufacturer of what were once called “foundation garments.” Given Mintzberg’s long career at McGill, it may well that in empirical research, as in real estate, nothing propinqs like propinquity. Nevertheless, these particular examples now appear as dated exemplars of the “Duddy Kravitz school of entrepreneurship.” (Personal disclosure: my students had no idea whom I was referring to but older readers might.)

In MAL’s version of the entrepreneurial school, strategy making is centred in the CEO. That was certainly true for the Duddy Kravitz school of entrepreneurship, in which most of the employees were unskilled laborers making minimum wage. But that is far from the situation at high-tech or Internet startups, where most of the employees are skilled professionals. Contrast the number of Microsoft millionaires with the number of Steinberg millionaires. So being out of date has consequences for the conceptual framework developed.

MAL would have stimulated much greater interest on the part of my students if they had chosen leading-edge contemporary firms (Apple and IBM are two obvious ones) and applied the different schools to the evolution of each. Indeed, this is what my students are doing in their papers.

This approach of applying different conceptual lenses to an empirical context, be it an institution or a sequence of events, has a distinguished precursor: Graham Allison’s deconstruction of the Cuban Missile Crisis to illustrate his three models of decision-making. Allison had the advantage that even though the Cuban Missile Crisis happened half a century ago, its world-in-the-balance storyline continues to stimulate interest, in a way that is not the case for Sam Steinberg (or even, had Mintzberg studied him, Sam Bronfman).

Mintzberg is well known for his advocacy of emergent strategy, discussed at length under the rubric of the learning school, as well as for his critique of strategic planning, the core of his chapter on the planning school. I find the former very convincing but the latter much less so. Mintzberg’s critique of strategic planning was published in 1994 and took aim at large scale corporate strategic planning exercises conducted in the 70s and 80s. Since then the importance of information as a factor of production has become obvious. Information is all that many leading-edge companies (Google, Facebook) now produce. Technology enables companies to capture vast amounts of information about their customers. Data base management and spreadsheet software have become vastly more powerful.

The public and non-profit sectors have also made great strides in generating and using information. Examples that come to mind are performance management systems in the public sector starting with Compstat and finding more recent expression in NYC’s Mayor’s Management Report, the US Government’s data.gov initiative to make public sector data bases available for citizen use, and the Gates Foundation’s emphasis on generating data and using it to evaluate its programs. Metrics matter more than ever before.

MAL summarize their critique of the planning school with the italicized statement “Because analysis is not synthesis, strategic planning has never been strategy making” (p. 81). For them, the analysis of data is fundamentally different from the creative synthesis expressed in the choice of an organizational strategy. I would put it differently. Synthesis follows analysis like the left foot follows the right (a claim MAL makes about the relationship between strategy and implementation). There is a constant interplay between the generation and analysis of data and strategic choice. Mintzberg’s 1994 book was titled “The Rise and Fall of Strategic Planning” but its sequel could well be titled “Planning Reborn as Metrics.”

Readers familiar with Duddy Kravitz will also recall the adage “a spoonful of sugar helps the medicine go down.” MAL included many instances of what they felt were spoonfuls of sugar: cartoons to start each chapter; the extended safari metaphor, which incorporated poetry and designated an animal to refer to each school; and a plethora of conceptual diagrams. For me all of these intended spoonfuls of sugar were, to use another metaphor, rococo ornaments that made it hard to see the structure of the intellectual edifice MAL were trying to build. I thought the cartoons were sometimes not relevant to the chapter, the safari metaphor was overwrought, the poetry was too cute, and the diagrams were imprecise and unclear (such as those on pages 79, 34, 162, 202, 225, 342, 344, 349, 384, 386, 391). I would add that I think one problem afflicting the entire strategic management field, and not just MAL, is the overuse of unclear conceptual diagrams.

To conclude: MAL would do much better to cut to the chase, base the exposition of each school on a small number of key writers, use up-to-date examples and carry them through the entire text, relegate the extensive literature reviews to appendices to each chapter, and be much more sparing in their use of cartoons, metaphors, and diagrams.

This brings me to Kiechel’s The Lords of Strategy. Keichel was not trying to write a textbook, but rather what he called a “secret intellectual history of the new corporate world.” By that he meant he was trying to tell the story of the academics and practitioners, particularly consultants, who developed the field of strategy management beginning in the mid-60s. Kiechel believes that many of these people, for example Bruce Henderson of the Boston Consulting Group, are not well known in business circles, but their stories would be of interest. Unlike MAL, who dealt exclusively with ideas, Kiechel organized his book around the three foci of ideas, organizations, and people. Thus, not only do we learn about the BCG growth-share matrix, but also about the early days of BCG and how the consultants developed it. Similarly, we learn about Michael Porter’s intellectual journey back and forth across the Charles River (between HBS on the right bank and the Economics Department on the left) and how it led to his theory of strategic positioning. Kiechel thus was following the practice of intellectual historians, not only writing about disembodied ideas, but also dealing with their originators and their organizational context. The overall verdict of the students, which I share, was that it served as a valuable supplement to Strategy Safari, and made the material come alive.

I offer two minor criticisms. As might well be explained by Kiechel’s Harvard degrees, career at Harvard Business Press, and HBP’s publication of the book, there was a strong emphasis on Harvard as academic institution and Boston-based consultants (Boston Consulting Group and Bain Associates) as practitioners. Perhaps it was a bit too Harvard or Boston-centric. Second, Kiechel’s writing is often ironic and subtle, for example his chapter on strategic management and the financial crisis of 2008-09. The argument goes back and forth for several pages before Kiechel concludes that strategic management was partially responsible. While there is nothing wrong with irony or subtlety per se, in a classroom context, a more direct statement of the argument would have been preferable.

No texts are ever perfect. The students and I worked hard to master both Strategy Safari and The Lords of Strategy. And we learned a lot about strategic management in the process. Based on the high caliber of the presentations I have heard, I am looking forward to receiving the students’ papers. And these books will be least partially responsible for this outcome.

Shortly after the 2011 election, the Harper Government established a subcommittee of the Treasury Board, tasked with making, to use Mitt Romney’s neologism, severely conservative budget cuts (up to $8 billion) in departmental base budgets. The result of their work would be called the Deficit Reduction Action Plan, thus emulating the high profile Economic Action Plan.

My late co-author Allan Blakeney took the view that the start of a mandate is the optimal time to “put the government through the wringer” to identify major budget cuts. Building on Blakeney’s lived experience as well as the Harper Government’s intentions, I decided to have the students in my University of Toronto-Scarborough public management class simulate the Deficit Reduction Action Plan. The eleven spending departments we simulated were asked to find $5 billion in savings from their operating budgets (exclusive of transfer programs) that totaled $80 billion. These cuts would be implemented in the 2012-13 fiscal year.

The last time we did this type of simulation exercise, we had the Ontario Government cutting $ 3 billion (see “Simulating the Ontario Budget Process,” my post of March 10, 2010). But in this case, we permitted revenue increases as a way of meeting budget cuts, and roughly $ 2 billion was derived this way, through partial privatization of the LCBO and an increase in hydro rates. This year’s simulation was tougher, because the ground rules assumed that a severly conservative government would not resort to “tax and spend,” but would prefer only to cut.

What, then, emerged from the simulation?

The first part of the simulation involved written submissions from the operating departments. They initially proposed a total of $2.4 billion in cuts, approximately half of total required. Some departments in the simulation (DIAND and DND) offered major cuts at the outset while others (HRSDC and Industry Canada) offered up very little. The second part of the simulation was a 2 hour Treasury Board meeting with the spending departments, chaired by the Treasury Board team (which included the Minister of Finance, President of the Treasury Board, and Secretary to the Treasury Board), to consider the proposed cuts and find additional ones. Given the two stage process, the spending departments had a variety of strategies: offer substantial cuts in the written proposal but then firmly resist additional cuts at the meeting; offer some cuts in writing (say 2-3 %) and keep others in reserve; or argue, both in the written proposal and at the meeting, that the department had taken large cuts the previous year or its work was too important to offer up anything more than token cuts.

The Treasury Board team did an excellent job running the meeting, so much so that they seemed to be channeling the spirit of the Chretien Government’s program review. They emailed the spending departments to announce that they had the firm backing of the prime minister for the $5 billion target. (As there was no role of prime minister in the simulation, this claim was incontrovertible.) They encouraged the departments that had offered up big cuts at the meeting to put the heat on the departments that were resisting and they told the departments that were resisting that they had better come to the meeting with some proposals. They managed the meeting so as to achieve their objective. They started with the departments that had offered the big cuts, thus highlighting their exemplary behaviour. There was no daylight between the Finance Minister and the President of the Treasury Board. They ran a tight meeting, giving ministers no more than a minute for interventions. The Secretary of the Treasury Board announced the running total frequently enough to create a sense of urgency. By the end of the two hour meeting, the departments had agreed to cuts totally $4.2 billion. The sense of momentum in the meeting was palpable and had the meeting gone on beyond the two hours of our class time, they would undoubtedly have reached the $ 5 billion total. In this case, the Treasury Board team made the last $ 800 million in cuts unilaterally.

The simulation, as an exercise in group dynamics, was a great success. It was also a success as a learning exercise, because it forced all the students to drill down into the federal estimates for the last two years. Some students made arguments against cuts in 2012-13 because departments had already taken major cuts in 2011-12. Other students used the information about strategic outcomes provided in part 3 as the basis of their decisions.

Nonetheless, there was some ambiguity about what was meant by cuts. For example, should a department be permitted to argue that it had experienced major cuts last year because of the scheduled expiry of Economic Action Plan programs? Does a reduction in last year’s planned spending increase qualify as a cut this year? In the real world, these issues would have to be adjudicated by the Treasury Board subcommittee at the outset, something our abbreviated process did not encompass.

At the end of the exercise, cuts of between 4 and 8 per cent of the departmental budgets were made. Substantial cuts fell on areas that are generally not considered to be priorities of the Harper Government: environment, arts and culture, and support for the universities. But what seems appropriate and feasible when discussed in a cabinet board room has a way of leading to raucous protest when it hits the “Canadian street.” (Personal disclosure: I was Scholar-in-Residence in the Ontario Cabinet Office in summer 2003, the last days of Harris-Eves Common Sense Revolution, and I remember watching from the Whitney Block almost daily protests on Queen’s Park Crescent below, a process I began to refer to as “the citizenry coming to express their gratitude.”)

We now await the Harper Government’s budget to be delivered on March 29. We’ve been informed that the projected deficit of $31 billion will shrink to a more manageable $25 billion. Finance Minister Flaherty has told us not to expect “intricate details” of budget cuts and we’ve heard hints of an early retirement program intended to thin the ranks of the Public Service of Canada by 30,000, in effect spreading the pain around without cutting particular programs. So perhaps the students of my public management course are, contrary to the usual expectations of the political preferences of twenty-somethings, the real “severe conservatives.”

Two recent separations of senior public servants, one a resignation and the other a dismissal, raise some important issues regarding the consequences of the key responsibility of senior public servants acting as advisors, namely speaking truth to power.

In 2010, Munir Sheikh, Chief Statistician of Canada, resigned over the cancellation of the compulsory long-form census. Sheikh had advised against making the long form voluntary, and it appeared that for him the final straw was that his political master, Industry Minister Tony Clement, publicly misrepresented his advice.

Earlier this week, Gary Webster, Chief General Manager of the Toronto Transit Commission, was dismissed by a 5-4 vote of his nine political masters. In his case, the precipitating incident was that at a TTC meeting held in public he gave a professional opinion supporting the expansion of light rail transit, thus contradicting Mayor Ford’s position that only subways should be built. The TTC held an in camera meeting concerning Webster, and Ford’s supporters, holding the majority, were able to dismiss him.

Both men, based on their professional training, spoke what they considered to be truth to power. In both cases, their political masters refused to accept their advice.

Sheikh had fulfilled his obligation as a senior public servant to give his best professional advice to his minister. Notice that he did this confidentially. When his advice was rejected, he could have stayed on to implement the voluntary survey, making it as representative as possible. I would assume that the public misrepresentation of his advice by his minister was what led him to feel that the relationship of trust was destroyed and hence decide to resign.

Undoubtedly Webster gave his advice about transit expansion to his political masters in private prior to the public meeting. Giving his advice at the public meeting was, in effect, a political act. He conceivably could have pulled his punches, dissembled, or even reversed himself. To his credit, he did not. He said in public what he said in private. One could argue that one purpose, perhaps the main purpose, of the public meeting was to create a justification for firing Webster.

It is nonetheless gratifying that Webster was dismissed without cause. To dismiss him with cause would have required the commissioners to assert that agreeing with the mayor about policy issues was a requirement of the Chief General Manager’s job, and even the mayor’s supporters did not make that assertion.

If we are now in an era in which some politicians are demanding “faith-based policy analysis” then it is gratifying that there are at least a few public servants who are willing to publicly reject politicians’ ideological conclusions that contradict professionals’ evidence-based policy analysis.

What have been the personal consequences for Sheikh and Webster? Sheikh is now an Adjunct Professor and Distinguished Fellow at Queen’s University. He was embraced by the professional community for whose values he put his career on the line. In Webster’s case, because he was dismissed without cause two years before his planned retirement, the financial consequences will be minimal. I hope that he does not slip into a silent retirement, but continues to speak out on transportation policy issues.

We may over the next while see more resignations of senior public servants who disagree, for professional reasons, with political decisions. Public resignations at least have the benefit of stimulating public debate. (One can think here of Keynes’s resignation from the Treasury over German reparations after World War I and his publication just a few months later of the book The Economic Consequences of the Peace.)

If public resignations of senior public servants are an expression of a professional consensus of opinion, then it would be appropriate for their professional communities to support them, in terms of both the issue and the provision of some kind of position, say at a university or a think tank, from which they can remain actively engaged. This certainly was the case for Sheikh and I hope it will also be the case for Webster and indeed for future senior public servants who are willing to speak truth to power, regardless of the immediate consequences for their careers.