Managers without management
The background of the Hungarian government's recent blunders
Hungary seldom grabs the attention of the international media unless it has to do with EU politics or democracy. However, last week, it was in the headlines twice. The New York Times released CCTV footage from the Hungarian embassy in Brasilia, showing that Jair Bolsonaro had stayed there for two nights when he was afraid of being arrested. German newspapers also published a story about the far-right website Voice of Europe and how Russians used it to pay off politicians. According to Spiegel, several Hungarian politicians are also on Putin's payroll.
In both instances, confidential and top-secret information has been leaked to the foreign press. A friend who has experience in security and covert operations jokingly told me there would be no Easter weekend leave for Hungarian secret services. In both cases, someone has infiltrated the Hungarian government's covert operations and made it a laughing stock. As a result, there is severe diplomatic pressure on the Hungarian government to provide an explanation.
The Hungarian government has once again taken sides against its allies in recent cases. Politicians from both the USA and the EU have pointed out that these actions openly defy our duties as NATO allies and EU members.
These events reveal a phenomenon seldom discussed in mainstream press yet important to understand Hungary. The way this country is managed.
After more than 30 years of exposure to Western management practices, there is still a good deal of confusion between management, administration, and strategic leadership in Hungary. This is not a Hungarian specialty, and this confusion is omnipresent in countries once part of the German and Austro-Hungarian Empires.
The birth of continental European bureaucracy
During the 18th century, absolute monarchs wrestled control of the state from the hands of the aristocracy and clergy, creating a corps of officers they could trust and control. This marked the birth of European bureaucracy, which turned administration into a science and a way of life.
Multiple generations of families often went to work in the same or similar roles within the administration. Max Weber observed that the bureaucracy became a branch of power within the state, and its members became at least as loyal to the corps as to the elected politicians on top.
The US has courts, we have bureaucrats to control the government
This may seem undemocratic and incompatible with the American project-based management approach. Indeed, modern bureaucracy was originally designed to make life easier for dictators. It's also true that bureaucracy is rigid and inflexible, like Jefferson's face carved into Mount Rushmore.
However, this rigidity acted as a moderator, first for the monarchs and later for the ever-changing elected politicians in the new system. Changing the course of a bureaucratic organization takes time and carefully crafted messages, but when it does change, it effectively serves its new purpose.
This article is already quite lengthy, so I won't delve into the business management implications. However, those who did business with a major German company will understand what I'm talking about.
Don’t be fooled with “modernisation”
There are some valuable lessons to learn from Central European bureaucracy when it comes to politics.
1. A leader or manager who doesn't know how to navigate bureaucracy will fail.
2. As ugly as it is, bureaucracy is essential to the continental European version of the modern rule of law democracy. In the Anglo-Saxon version, the government is kept in check by the wide range of opportunities to challenge their actions in court. In the continental version, the government's own organization fulfills that function.
The term "streamlining" bureaucracy has been a top buzzword in European politics for at least a century. However, bureaucracy often remains untouched despite efforts to reform it. To truly dismantle these bureaucratic structures, democratic checks and balances must be overthrown or circumvented. Most politicians recognize that they can benefit from the organizational knowledge that these structures possess. Additionally, these structures often effectively channel expertise and knowledge. It's worth mentioning, however, that sometimes outdated knowledge is kept in the mainstream with the same effectiveness as current knowledge.
When a European politician truly dismantles bureaucracy that is a red flag. It signals inept leadership skills and authoritarian intentions.
Hungarian administration under pressure
Since about 2006, when Ferenc Gyurcsány and the Socialist Party won the elections, the whole government structure has been under constant pressure. By 2014, when Viktor Orbán was reelected after his landslide victory in 2010, it had crumbled.
After coming to power in 2010, Viktor Orbán introduced HR reforms that stripped bureaucrats of their privileges. By 2011, it was clear that Orbán would not tolerate any criticism or dissent (or even less than an enthusiastic following of his orders) from the bureaucracy.
The first kill
In 2011, the Budapest Ferihegy Airport, our main international airport, was renamed. “Ferihegy” is simply the part of Budapest where it is located. The government wanted a fancier name. They wanted to name it after the great Hungarian composer, Franz Liszt.
A committee in the Ministry of Agriculture was responsible for naming locations in the country. This committee was established in 1989, but earlier versions of it date back to the 19th century.
Hungary's bureaucratic traditions require every place to have an official name. If there is an official name, there must be an office that gives an official name and maintains a register of official names. This is a great example of Hungary's bureaucratic processes if you are from a less bureaucratic place.
The committee has decided that the name proposed by the Prime Minister's Office for the airport does not meet the established naming standards. They have observed that "Ferihegy" has become synonymous with the airport, and thus, it would be unwise to exclude it from the new name. Additionally, they have noted that the new name ("Budapest Liszt Ferenc Nemzetközi Repülőtér") is too long, and does not follow the natural rhythm of the Hungarian language. As a result, they believe that people will not refer to the airport by this name.
Orbán’s reaction was ferocious. The leader and most of the committee members were sacked. A new decree was issued allowing the government to name any place in any way it liked, as long as it was considered a "case of special interest." (Of course, the committee was right. The airport is still commonly referred to as Ferihegy, or jokingly as Lisztferihegy.)
A recurring pattern
During Orbán's 14-year rule, numerous situations like this have arisen, perhaps even hundreds. The recurring pattern is as follows:
They propose a "great idea."
Experts and the administrative staff indicate that it is not a good idea.
They dismiss the experts and administrative staff.
They boast about their innovative and dynamic management approach, which will prove that the administrative staff was wrong to delay them.
They eventually fail.
Previously, failures like this were only known to a limited audience for two reasons. Firstly, between 2010 and 2022, wages and living standards in Hungary steadily increased, and people were not interested in policy and management failures. Secondly, Orbán's propaganda machine was effective in diverting attention from these failures.
Recently these mistakes are getting more and more exposed.
The scandal that shattered Orbán's control on public discourse broke out. President Katalin Novák and Justice Minister Judit Varga granted clemency to an individual named Endre K. He had been convicted for covering up sexual abuse in an orphanage. The scandal occurred because the two officials did not follow their teams' advice (and the established procedures).
Péter Szijjártó's ministry of Foreign Affairs is known for its "new and dynamic" leadership style. Szijjártó decided to dismiss most of the old and experienced staff, the "clumsy bureaucrats". This of course left the team without any experienced members who could advise them that Bolsonaro is closely monitored by Brazilian authorities. Thus, taking Bolsonaro in could be a major mistake that might lead to an embarrassing situation.
The consequences are coming
The Orbán-government follows the belief that making quick decisions is the mark of good leadership. However, they misunderstand Western management practices that prioritize teamwork and collaboration in decision-making. While they have moved away from old hierarchical structures, they have failed to adopt more modern management practices. As a result, their decisions often serve as textbook examples of management failures.
So far, they got away with it. That may not last forever. The loss of important government members, billions in EU development funds, and negative coverage in the New York Times due to a ridiculous diplomatic blunder are just the first signs.