The reported appointment of Condoleeza Rice to the job of Secretary of State is yet another signal that President Bush plans fundamental changes in the way the government of the United States operates. The Department of State, like the Central Intelligence Agency, has long marched to its own drummer, often undermining or redirecting the policy initiatives it has received from above. Change is needed.

Colin Powell, an able and loyal Secretary of State, faithfully represented the institutional interests of the bureaucracy he headed, while working toward the goals his president gave him. But the entrenched bureaucracy, which spends most of its time seeking ways to work with (i.e., compromise with) foreign governments and international agencies, understands that Presidents (and Secretaries) come and go, but they and their international counterparts remain. Comfortable 'understandings' bind those representing us with those representing the agencies and governments with whom they deal. After all, they have a lot in common, and a pretty good thing going. To say that they are reluctant to disrupt these unspoken agreements on how things get done is to understate the case.

The appointment of Porter Goss to head the CIA is already drawing screams of outrage from below. That is mostly because he is knowledgeable, having worked in the Agency himself, because he has functioned in an oversight role as a Congressman, and because he is committed to changing the way the CIA does business. Bureaucracies always resist change in their operating assumptions and methods.

Dr. Rice is an ideal appointment to bring about change at the Fudge Factory, as the State Department is sometimes known. Not only is she a brilliant, hard—driving, and iron—willed confidante of President Bush, she is highly familiar with the ways of calcified, underhanded and dysfunctional bureaucracies, having studied and worked on two of the worst such examples. Her academic career was as a Sovietologist, a student of the bureaucratic system whose Byzantine inner wars were as fierce as the Cold War.

Her resume also includes a stint as Provost of Stanford University. Speaking as a former professor myself, I can testify that anyone who takes on an institutional leadership role in the ivied groves of academe (make that eucalyptus—shaded groves of Stanford), has a particularly acute sensitivity to the ways and means of internal rebellion and sabotage from the ranks below. Not to mention utterly vicious in—fighting. Condi Rice emerged from years as Chief Academic Officer of Stanford with her reputation not just intact, but enhanced.

Now that President Bush has a solid mandate from the voters, a workable majority in the Senate, and is implementing a hard—nosed plan to deny the terrorists in Iraq any safe—base strongholds, he has both the opportunity and the means to undertake a broader agenda of change. In his first term, his scope of action was necessarily far more limited, and his ability to take command of recalcitrant bureaucracies imperfect, to say the least.

Because he is highly—trained in the discipline of management, President Bush understands that his priorities have to be limited to a few key initiatives, and that they have to serve multiple and consistent goals. It is now apparent that one of his major thrusts will be to tame the tendency of important government organs to serve their own ends, not those of the political leadership. Underlying this thrust is the broader inclination of government bureaucrats to favor the Party of Government (The Democrats) rather than the Party of the People (The Republicans). Bringing about an extended era of Republican dominance (one of the President's major goals) requires weaning the bureaucrats from their operational loyalty to the Democrats.

Condoleeza Rice enjoys membership in the President's inner circle. She is reported to be regarded as almost a member of the family, which is saying quite a lot when the family in question is the Bushes. Just this past weekend, the President covertly escorted the future Secretary of State to a surprise birthday party at the British Embassy. This sort of closeness speaks volumes. Not only is her loyalty unquestioned, but her access to the President is both excellent and known to be excellent.

Moreover, Secretary of State Rice will undoubtedly continue to have access to the National Security Council, assuming her deputy is appointed to replace her as National Security Advisor, which seems likely. She will have a parallel hierarchy (albeit a much, much smaller one) available, an advantage that organizational theorists recognize as extremely important. One of the traditional trump cards played by the striped pants crowd at State is control over information. The Secretary is helpless, and can be made to look very bad indeed, if certain bits of information don't arrive in a timely fashion. Dr. Rice will have an alternative mechanism for checking and testing, whenever anyone foolish enough to play the trump card makes his move.

The 'Bush is stupid' meme still survives among certain segments of the American self—styled intelligentsia ("stupidigentsia" would be a more appropriate term, if it existed), despite his repeated shellacking of his opponents. But even those who are prepared to admit that he is a formidable opponent (think: State Department insiders) fail to understand the depth of his training in the theory and practice of executive leadership. President Bush is an expert at organizational change.

When he was a student at Harvard Business School, President Bush studied the process of changing entrenched dysfunctional organizations. He learned in detail how to identify and analyze the sources of resistance to change, how to 'unfreeze' an organization from its accepted way of doing things, and how to use the tools available to an executive, in order to install a self—reinforcing cycle forcing even the most reluctant surviving bureaucrats to behave in new ways.

One of the capstones of his learning at HBS was a detailed case study of change at a very large bank. The newly—written (when the President was a first year MBA student) case followed the actions of a young executive, dispatched by the powerful CEO of this bank to turnaround the back office check—clearing operations, which were becoming increasingly expensive, while delivering poor quality service.

By completely re—conceptualizing and then redesigning the very nature of the operation, by taking bold action, by installing measurements which instantaneously revealed problems as they developed, and by installing and rewarding loyal, capable, and hard—driving subordinates in key roles, the young executive triumphantly accomplished unprecedented  success, and became a model for the rest of the banking industry, worldwide. He also turned a backwater expensive operation into a major source of profits.

The young executive was named John Reed. After his check—clearing triumph, he went on to become a high—flyer at his bank, then known as Citibank (now Citigroup). In a few years, he became CEO himself of Citibank, and a legend in the annals of both banking and management. Generations of Harvard MBAs have cut their teeth studying his remarkable effectiveness as an agent of change in a calcified, expensive, and dysfunctional bureaucracy.

Something tells me Dr. Rice knows a thing or two about John Reed.

Thomas Lifson received his MBA from Harvard a year after George W. Bush. He was named Baker Scholar there, and went on to teach as a member of the faculty. He is the editor and publisher of The American Thinker