David R. Henderson  

Undercover Boss: A Post-Mortem

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Now that I've seen the Undercover Boss episode about the Cincinnati mayor, it's time to analyze. See here for my predictions. The bottom line is that I was on to something. Alex Tabarrok, in a comment on my previous post, gave some of the evidence for it. There is more:

1. I found it interesting that, even though the mayor had fooled the meter maid, who had had her suspicions about his real identity, he told her who he was before they went out on the afternoon shift. He didn't wait, the way the past private-sector employers did, for the days-later meeting. Why? I think it was because he found her story about her son's illness moving and he wanted to tell her ASAP that he would do something for her. This is the desire for instant gratification that we see so often in politicians. I think he wanted the immediate credit for being a good guy.

2. Another interesting thing is that with most of the private-sector jobs, the undercover boss was actually put to work on top of the work that the supervisor was doing. In this one, that didn't happen as much. While working with Danny to pick up dead animals, he mainly drove around with Danny as his companion. He didn't add much, if any, productivity. While working with Karen in the rec center for kids, we saw him play volleyball with the kids and maybe help a little with hotdogs, but that was about it. With the meter maid, he accompanied her but they did parking tickets together: there was no additional productivity. The only possible case of increased productivity was repairing motorcycles but we weren't shown enough to be able to tell whether or how much he did.

3. Notice what he said about why he wanted the GPS for Danny driving around in his truck: "I want to make Danny's job easier." Not "I want to make Danny more productive."

4. I'll highlight one thing that commenter Alex Tabarrok pointed out:

I did feel that the gifting was a bit slimy. Hard to say what the mayor should have done but what is one to think when the mayor's 'friends' give random workers checks for $10,000?

Exactly. What favors will the mayor owe his "friends?"

5. Notice the irony of giving $10,000 to the motorcycle repair mechanic. As commenter Pandaomoni pointed out, what does he do with it? Retire early.

On my previous post on this, commenter "mark" cryptically stated:

I predict that your predictions will come true, in part, because you already have prejudged the show.

I'm not sure what this means other than that when one predicts, he is, in a sense, prejudging. But there's nothing about prediction that says that your predictions will come true. It's a tribute to my model of government vs. private incentives that some of them did come true and that other things, that I didn't predict, are things that the model would predict. As I often tell my students, "I'm not brilliant; my model is brilliant."


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CATEGORIES: Labor Market



COMMENTS (11 to date)
Vinnie writes:

A private sector CEO would've had a better disguise. That goatee looked like it was made of rubber.

Andy writes:

I think you are missing this obvious here. This guy is a politician and politicians are primarily concerned about getting reelected. Being on a prominent popular national TV show ensures he is going to act in whatever way he thinks will cast him in the best light to his constituents in order to increase his chances come election time.

Furthermore, politicians know that personality matters more than substance to most voters who are, at best, marginally informed about issues. Politicians know that displays of empathy appeal to voters ("I feel your pain"). They also know that their opponents will cynically use anything they can to defeat them - hence there is nothing to gain from being anything but magnanimous on this TV show. To do otherwise is to give the next political opponent ammunition in an election. Therefore, his actions are completely consistent with what we would expect of a politician acting in front of a camera.


In stark contrast, the CEO of a private company does not depend on the public's good feelings to keep his/her job. A CEO must consider PR, but has no immediate need to pander to the audience. Thus, the motivations of this mayor and CEO contestants are fundamentally different, so it is not any surprise that they would act differently.

Nicholas writes:

David,

One of the privite sector employees did reveal he was "the boss" before he was supposed to as well. He was the boss of a property restoration company (Belfor). The person he revealed himself to had been working for about a year or so after being given a significantly more prominent role but had still been getting paid the previous wage (she was promoted durring a wage freeze). The boss was not happy with the injustice done to her and wanted to tell her something would be done.

darjen writes:

I didn't watch the mayor episode but I did see several other episodes of this show. I suspect that if government supporters saw your comments, they would simply dismiss them out of hand as you being biased against the government.

After they dismissed your opinions, they would probably defend this show's episode as more evidence of why unions are necessary. Then claim that the whole reason government workers were less stressed and not crying is because the unions gave them better working conditions, better pay, etc.

Patrick writes:

David -
You've already commented on this, so I won't beat the horse to death...but perhaps if you commented on observations that were in line with your expectations vs. observations that were not in line with expectations....that would go a long way toward convincing folks that you watched the episode with an open mind...

David R. Henderson writes:

@Patrick,
Good point. Here are three. The meter maid made clear that they were to cut people some slack when running up to the car and trying to avoid a ticket. Danny didn't goof off and seemed to take his job seriously. Karen seemed to love the kids rather than being indifferent. I'm not saying I expected the opposite on all these but the average showed government working somewhat better than I expected.

Patrick writes:

David - very much appreciate the response, as well as the initial post. Thanks for all that you do to make this site great.

Aside: after years spent in corporate america - balanced against witnessing govt from a distance (parents were a teacher & a postal worker) - my gut has always been that govt is riddled with waste, but so is corporate america.

David R. Henderson writes:

@Patrick,
Thanks and you're welcome. My father was a high-school principal and teacher, all in government schools. I think he was a reasonable principal although he had no people skills--which got him fired by school boards a couple of times. But he was a great teacher and worked hard.

scott clark writes:

DRH,

You're missing some other big ones here. The constant complaints that the city council was going to slash their budget came from the two areas that could have easily been outsourced, most likely for real savings to the city and its taxpayers. The mechanic taking care of the motor pool complained that their budget was always in jeopardy but rightly so because that work could be farmed out to competing private garages with just a few contract managers rather than the mechanics' labor, the real estate costs, the automotive diagnostic and repair tools, and more. Same with the rec center. She too worried the most about her budget being cut, never mentioning that private after school rec programs could take up some slack for cheaper even if they relied on some subsidies from the city.
They were worried about their budgets but never talked about doing more with less, or trying to figure out how to provide better value to the city, the way some in the private sector, especially the customer facing employees, have expressed in previous shows.

David R. Henderson writes:

@scott clark,
Good ones. Thanks. The common thread I'm seeing in all your examples is their failure to think through alternatives that don't involve expanding their budgets.

Cryptic Mark writes:

I didn't think you would be entirely open minded in viewing the show after you had made such public predictions. It is common practice on at least one network not to have the announcers give predictions on the football games that they are doing. Anyway, you seemed to approach the subject fairly and since I didn't even see the episode, I appreciate the recap. Yes, a CEO must consider PR, considering millions of people will be having their opinion shaped by one hour of TV.
The last meeting I had with a CEO went like this. Fifty-five minutes of generally up beat presentation followed by...well there really wasn't any time for questions, so have a nice day.
On the other hand, I literally can't vote for the guy, it is a private company, so the questions and answers would have been somewhat irrelevant.

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