(FORTUNE Magazine) – NOTHING tests a President like a world crisis. The one Saddam Hussein handed George Bush in early August had just about everything: blatant aggression, horrendous economic ramifications, and no easy way for the U.S. to exercise its power. To make the testing even more severe, the Iraqi tanks rolled into Kuwait just as a few other things were unraveling for the President. Bush had wafted into his second summer on a cushion of good will. The Cold War was over. The economy was still growing, although sluggishly. Despite 13 successful vetoes, Bush's relations with Congress remained chummy. And his approval ratings topped the charts.

| Then his charmed life abruptly ended. Bush broke his no-tax pledge. The price of the S&L bailout exploded to $100 billion-plus, and the President was dramatically linked to the scandal through his son Neil's directorship of a bankrupt S&L. His deficit reduction talks with Congress collapsed, and it looked as if he had given away the defining Republican issue for nothing. His approval ratings dropped sharply. When the Iraqi invasion sent oil prices soaring and the Dow plummeting, murmurs began around Washington demanding stronger action. One Washington disc jockey taunted: ''Kick ass, George. Kick ass.'' Sorry, boys. In calm or crisis, manager Bush is much the same: energetic, engaged, consultative, and ever cautious. While Ronald Reagan governed with bold ideas expressed passionately and often, Bush prefers behind-the-scenes dealmaking with friends. Not only does he feel uncomfortable in the bully pulpit, he believes public sabre-rattling -- whether aimed at recalcitrant Democrats in Congress or an Arab dictator running amok -- is counterproductive. Instead he goes out of his way to build consensus one-on- one, behind closed doors. Yet, if Americans begin demanding bolder leadership, and Bush seems stymied in the Middle East, he could stumble on vision as Reagan did on details. George Bush's is a high-energy, do-it-yourself presidency driven by a zest for problem solving -- or as he put it in his acceptance speech at the Republican National Convention, ''missions defined, missions completed.'' He understands the mechanics of government, and he loves to pull the levers. While he respects the bureaucracy, he often circumvents it, going out of channels for information. He dives into the nitty-gritty of policymaking. And yes, he likes to check who's playing on the White House tennis court and horseshoe pit, who's flying on Air Force One, and who's sitting next to whom at White House dinners. Bush hates controversy, values secrecy, and delights in surprise. He is cautious but will take a calculated risk. Though he reaches out for a broad range of opinion, in the end he turns to a very few close aides, mostly in the White House, where power within the Administration has become increasingly concentrated. He delegates, but like a CEO who's held every job in the company, he sometimes can't resist penciling himself in. He insists on loyalty and team play, but make no mistake, he loves being captain of the team. WHILE MOSTLY a plus, Bush's hands-on management style has its minuses. During the abortive coup against Panamanian strongman Manuel Noriega that preceded the successful U.S. invasion, the President's attention to detail proved paralyzing. Taking calls directly from the field, he turned the Oval Office into a military operations center replete with maps and raw intelligence data that he personally ordered from the CIA. Buried in unfiltered and often contradictory information, the President hesitated and the coup fizzled. Since then, procedures for crisis management have emphasized more thorough staffing. The invasion itself was a model of delegation. After Bush made the basic decision, he let Defense Secretary Richard Cheney and his generals manage the operation. Between phone briefings by Cheney every 20 minutes or so, Bush called world leaders to inform them of the U.S. action. Bush's handling of the Iraqi crisis followed the same pattern. After he learned of the attack around 9 P.M., he instructed U.N. Ambassador Thomas Pickering to call a meeting of the Security Council. While National Security Adviser Brent Scowcroft worked through the night in the White House situation room, Bush slept. Scowcroft awakened Bush at 5, and the President signed orders freezing Iraqi assets and blocking most imports, including oil. The President was in his office by 5:45, watching the news, reading reports, and talking to aides. Though it turned out to be a very long day, it included most of what Bush had on his original calendar. He flew off to Colorado for a scheduled meeting with Britain's Margaret Thatcher, who joined Bush in strongly denouncing the invasion. In between meetings, speeches, and a press conference, Bush squeezed in detailed discussions by phone with the leaders of Egypt, Jordan, Yemen, and Saudi Arabia. Though the Pentagon got three carrier battle groups moving toward the region, the President understood that his military options were difficult at best. He worked for consensus among Arabs, whom he recognized would be key to any move against the Iraqis. Bush did not have to phone Soviet President Mikhail Gorbachev, because Secretary James Baker was already meeting with Soviet Foreign Minister Eduard Shevardnadze in Siberia. After flying to Moscow, they made a joint statement demanding Iraqi withdrawal and an end to arms shipments to Iraq by all countries. Throughout the early hours of the crisis, Bush characteristically revealed little in public. The President's emphasis on teamwork has its occasional downside. Says one aide: ''Sometimes controversial ideas and issues get swept under the rug.'' Adds former Bush chief of staff Craig Fuller: ''People tend to watch where Baker and ((Budget Director Richard)) Darman are coming down on an issue, then fall into line.'' Sometimes the President may put too much faith in individuals. After the Tiananmen Square massacre, Chinese leader Deng Xiaoping, who once called Bush ''old friend,'' would not even return his phone call. His near obsession with secrecy can backfire too. Had he talked with conservatives before breaking his no-tax pledge, Bush might have avoided an embarrassing vote in the House Republican conference against any tax increases. His misinformation campaigns have from time to time undercut his otherwise warm relationship with the press.

The presidential management style took shape during Bush's struggling days as a Texas oilman. Recalls younger brother William ''Bucky'' Bush, who worked on his rigs as a roughneck: ''He knew all his people by their first names. He studied geological charts and logs to figure out what properties to buy. Then he'd assemble rights, raise money to drill, and get a chunk of the common stock for his sweat equity.'' He was a risk taker, but within limits: Unlike many wildcatters, he didn't personally guarantee anything. His deals always had more upside than downside. Most important, the young Bush placed a high priority on people and trust. ''In those days deals were done on a handshake,'' says Bucky Bush. ''On closing day you'd whip up a two-page contract, then you were off and running. The key was personal trust and knowledge of character -- and boy, were there some characters in Midland in those days! If you didn't know the good ones from the bad, you were history.'' Such personal skills helped George Bush boost morale at the Republican National Committee during Watergate, and at the CIA after congressional revelations of wrongdoing. At the CIA's Langley, Virginia, headquarters, he often rode the employee elevator instead of the personal one reserved for the director, and he asked that staffers call him George. (When he left a year later, he received a standing ovation in a crowded CIA auditorium.) His first day as President Nixon's Ambassador to the United Nations, he shook every employee's hand at the 12-story U.S. mission in New York. Says White House Chief of Staff John Sununu: ''He is a master of the small gesture.'' With the exception of four years as a Texas Congressman, Bush's management experience has always been in executive jobs where business was conducted mostly in private. Loose lips don't work for oilmen, party chairmen, diplomats, spy masters, or Vice Presidents. A member of the secret Skull and Bones Society at Yale, Bush reveled in the cloak-and-dagger privacy of the CIA: He once stunned aides by coming to a meeting in a CIA disguise -- a red wig, a big nose, and thick glasses. As Vice President he steadfastly refused to tell even his closest aides what he was saying to Reagan. His Chief of Staff Admiral Dan Murphy told prospective employees: ''If you leak, you will be fired.'' Not surprisingly, his office was known as a tight ship. AT THE WHITE HOUSE, Bush's past is prologue. Outraged by the internal warfare that characterized the Reagan Administration, Bush put a high priority on team play. While Reagan turned to a headhunter to fill most Cabinet and White House posts, Bush personally chose loyal and seasoned friends. Sitting around the pool at Camp David, First Lady Barbara Bush told Environmental Protection Agency Administrator William Reilly, the only newcomer to Bush's inner circle, ''I said to George: 'You know, almost your entire Cabinet are our friends.' He said: 'Well, what would you expect?' '' Beyond the Cabinet, Bush chose personal friends for most top White House positions as well as some judgeships, ambassadorships, and a surprising number of key agency positions. Among them: the Peace Corps, the Federal Trade Commission, the Federal Energy Regulatory Commission, and the Overseas Private Investment Corp. To drama seekers' dismay, the bickering has stopped. It's not that Bush's team lacks ego or differences of opinion. No one has ever called Baker, Darman, or Sununu fainting flowers. But in sharp contrast to the Reagan years, Cabinet members and senior White House aides have direct and frequent access to the President. He invites strongly argued points of view and takes his time deciding. But once he's spoken, he expects his troops to fall in line. Bush told a packed Republican fund-raiser on his 66th birthday in June: ''I thank my lucky stars that we can fight like cats and dogs in Cabinet meetings but once I make a decision, move on as a team.'' He also likes to point out: ''Loyalty is not a character flaw.'' Bush shares credit, often allowing his Cabinet Secretaries to announce new initiatives. He also shares blame. After his devastating defeat in the Iowa caucuses, his Iowa campaign manager Richard Bond said, ''It's my fault.'' $ Replied Bush: ''No, it's mine.'' Similarly, in policy battles the loser is rarely punished. More often he's built up. Shortly after Transportation Secretary Sam Skinner lost to Darman in a bid for more money for roads, bridges, and other items of infrastructure, Bush invited him to Kennebunkport for a weekend of golf, boating, and family fun. At 6 A.M. on Saturday, Skinner heard a knock on his cottage door. When he opened it, he found the President in his robe, carrying a tray with a pot of steaming coffee. ''It's your wake- up call,'' said Bush. While Reagan inspired his staff with a few big ideas articulated often and with feeling, Bush keeps his team of problem solvers on their toes with rifle- shot questions. Bred on sports and socializing, he prefers people and action to theory. He was raised in preppy Connecticut, where grand notions passionately expressed were considered freakish. While Reagan focused on a single issue of the day, Bush handles dozens at a time, often blurring his message in a whir of activity. When he talks off the cuff, sentences disappear in a tumble of words and clipped phrases. Even when he's listening, he's apt to be fiddling with something. TYPICALLY Bush begins his day at 5:30 to strains of country music, after about 6 1/2 hours' sleep. As he sips coffee and watches CNN, he skims the New York Times, the Washington Post, the Washington Times, the Wall Street Journal, USA Today -- for the baseball scores -- and the Houston Chronicle. By 6:30 he's eating a breakfast of grapefruit, coffee, and sometimes bran cereal in his private study behind the Oval Office, usually alone. Then there's an hour for reading, note writing on his electronic typewriter, and phoning unsuspecting aides before his regular national security briefing at 8:15. When Treasury Secretary Nicholas Brady caught a glimpse of Bush walking from the residence to the Oval Office for that briefing, his old friend and campaign chairman pointed to his watch in mock disapproval. Minutes later a note arrived in the Cabinet Room: ''Brady, I've been at work since 7:10. I just got back from a meeting at the residence.'' After his national security briefing, Bush meets with Sununu for up to an hour, working through a briefing book of ''action items'' that could range from a California poll to a speech draft to a legislative update. Afterward his day is scheduled minute by minute with meetings and events until 4:30 or so, when Sununu returns with the ''P.M. agenda,'' a second notebook filled ! with items for the President's approval. Even with his tight schedule, Bush often squeezes in spontaneous events -- an unannounced appearance at a meeting, an impromptu news briefing, a quick lunch on the Hill -- before leaving the office around 6:45. Says Deputy Chief of Staff Andy Card, a former Reagan aide: ''Reagan was comfortable with structured events. Bush invites spontaneity. He manages by walking around.'' Most evenings the President has either a formal event or dinner with friends. It's not unusual for him to phone Cabinet members, staffers, or old friends on the spur of the moment to ''come over for a beer and a movie.'' Or he may go out to one of his favorite local restaurants. He never dines with four if he can find 40, and he loves house guests. Says one aide: ''In the past the White House family quarters were as accessible as the Dalai Lama's palace. But with Bush, it seems the mattress in the Lincoln Bedroom is never cold.'' He also may fit in some exercise -- maybe tennis, horseshoes, racquetball at the House gym, jogging at Fort McNair, or a fast game of golf. (He rushes through the course, rarely finishes, and never reveals his score.) Still, Bush manages most nights to spend some time in his study on the second floor of the White House, where he writes more notes, reads up to 30 briefing papers, and signs decision memos. Friends say he does not agonize over choices. When he needs a break, he might fiddle with a favorite fishing rod or box of lures he keeps in the closet. As he told his brother Bucky: ''I like to play with them. I put the orange ones with the orange ones. The green with the green. I check the lines. And I think about fishing off Islamorada,'' the area in the Florida Keys where Bush has fished for 20 years. Says Bucky: ''He relaxes with friends, family, and exercise. It's part of his ecosystem. It's the way we grew up. There were always games.'' When the Trinity River flooded in Texas last May, Bush choppered into the area and tromped around in the steamy heat. Then he flew on to Houston, landing at the Deerwood Country Club, where pro golfer Doug Sanders, an old friend, was playing host at a charity golf tournament. Bush played 18 holes on foot -- relishing every minute, save a few short putts. Said a weary cameraman at the sixth hole: ''Hey, this is nothing. A few weeks ago he played 18 holes, three sets of tennis, and then went jogging. He never stops.'' One staffer calls such marathons ''weekends from hell.'' Bush's warmth, energy, and accessibility have saved him from the isolation that plagues the presidency. While Reagan was Olympian with staff, Bush treats them like family. By now most have been invited to some homey event at the residence, Camp David, or Kennebunkport. Many have jogged, fished, motorboated, or played tennis, walleyball, golf, or horseshoes with the boss. Most feel they get a fair hearing. At his first Cabinet meeting, he encouraged calls and memos. When he gets them, he promptly responds by phone, note, or comments scribbled in the margin. When Sununu asked Cabinet members to keep him informed of such communications, Bush cut in: ''When you think of it.'' Nor has Sununu been a bottleneck. Says EPA Administrator Reilly, ''During the Reagan years EPA administrators had problems getting access not just to the President but to Don Regan, the Chief of Staff. Such a thing is unthinkable in the Bush White House.'' In general Bush prefers getting information from people rather than from memos. So did Reagan. But while Reagan was usually a passive participant, Bush is an active questioner. In preparation for Reagan's Soviet summits, the CIA produced movies and staged lectures. Bush's presummit briefings, by contrast, were interactive events involving heads of state and experts in and out of government. Before meeting Soviet President Mikhail Gorbachev at the Malta Summit last year, Bush got in touch with Prince Sadruddin Aga Khan, a U.N. official involved in aid to Afghanistan whom Bush had known since his own U.N. days. Bush invited his old friend to Camp David for a discussion of how Afghan factions were faring after the Soviet pullout. Before this year's summit he spoke with West German Chancellor Helmut Kohl, French President Francois Mitterrand, and British Prime Minister Margaret Thatcher, as well as several well-known Soviet experts. In such meetings Bush is moved by information, not ideology. Says Brady: ''He believes if you do the pick-and-shovel work, the solution will jump out. He likes a discussion framed by facts.'' If he can't get the answers he wants, he'll pick up the phone and call experts four and five levels down in the bureaucracy. Nor does he suffer unprepared pleaders gladly. When one Congressman questioned Bush's timid response to the Soviet embargo of Lithuania, the President shot back: ''What do you have in mind? What should I say when Soviet tanks roll in? We'll be right there? We couldn't protect the ) Lithuanians under any circumstances. They're not even in our orbit.'' Or as he often asks recalcitrant aides: ''If you're so smart, why weren't you elected President?'' Bush's independent style was evident in his nomination of Federal Appeals Court Judge David Souter of New Hampshire for the Supreme Court. With his top aides divided, the President retired to his small study behind the Oval Office, where, as is his habit, he jotted down on a legal pad in order of importance short phrases outlining the pros and cons of each candidate. He decided on Souter, a solid conservative jurist without a paper trail on controversial issues like abortion, then called his staff to tell them. IN FOREIGN POLICY Bush often circumvents the bureaucracy. When a lengthy government-wide foreign policy review failed to produce the bold arms control plan he wanted for his first NATO summit, Bush turned to Baker, Sununu, Cheney, National Security Adviser Brent Scowcroft, and William Crowe, then chairman of the Joint Chiefs, to come up with an alternative. Scowcroft proposed deep cuts in U.S. and Soviet manpower and planes in Europe. Bush liked the idea but wanted it studied more thoroughly by his military advisers. Days later Crowe told Bush the Pentagon could live with a 20% cut in manpower and a 15% cut in aircraft. Baker argued for a more dramatic 25% reduction. After checking with Cheney, Bush settled on 20%. ''OK, that's consensus,'' said the President. ''Let's go.'' He generally feels more confident on foreign than domestic policy issues. Aides say Bush phones four or five heads of state a week for a total that exceeds that of the last six Presidents combined. It's a habit that helped mightily in the Iraqi crisis. His wooing of Gorbachev, Kohl, and Mitterrand also paid dividends in European affairs. Says former U.S. diplomat Robert Hormats, now vice chairman of Goldman Sachs International, who recently dined with Kohl: ''Bush's personal diplomacy enabled him to discuss a new European security arrangement with Gorbachev in Washington without the Germans feeling he was going behind their backs. It's all about trust.'' In the domestic arena Bush is more likely to rely on the bureaucracy as a way of sorting out different points of view. But even then he often pulls the management of policymaking into the White House. The Administration's education, crime, child care, and clean air proposals were developed in small meetings with Cabinet members around an antique table in the West Wing office of Roger Porter, the President's domestic policy chief. To whatever is done by staff, Bush adds his own layer of personal intelligence gathering for what national security types call ''sanity checks.'' After the Senate sustained his 11th veto (Amtrak) and before it took up his 12th (the Hatch Act revision), the President slipped up to the Hill for a friendly, pulse-taking lunch with Senate Minority Leader Bob Dole, who was his GOP primary rival but is now a staunch ally, and longtime friend and hunting buddy Alan Simpson, the Wyoming Senator who is minority whip. A quick visit to the kitchen staff topped off the lunch. Before deciding to convene a budget summit, the President met separately in the family quarters with Dole, Senate Majority Leader George Mitchell, House Speaker Thomas Foley, and Minority Leader Robert Michel. Says Porter, who taught Harvard's course on the presidency before joining the Bush Administration: ''Every President does some of this. But Bush does a great deal more.'' WHILE the President casts his net wide for information, he turns to a few key aides when it's time to decide. Says one aide: ''At the top it's very small, very clubby. There's lots of camaraderie, humor, and male bonding. That's how the boys defuse tension and avoid burnout.'' The President's inner circle is filled with heavyweights, though of surprisingly different temperaments. There are three hard-nosed competitors -- Baker, Sununu, and Darman -- and two soft-spoken ones -- Brady and Scowcroft. A step removed from the inner sanctum are two brainy but mild-mannered professors: Porter, the domestic policy chief, and Michael Boskin, chairman of the Council of Economic Advisers. Chief White House counsel Boyden Gray, an old Bush friend and tennis partner, is also a trusted adviser. Bush is clever about using different personalities for different tasks. Sununu, the brusque but brainy engineer and former New Hampshire governor, plays bad cop to Bush's good cop. When Democratic Senator Daniel Patrick Moynihan proposed cutting Social Security payroll taxes, some conservatives appeared to be circling favorably around the idea. The White House thought for a while that the U.S. Chamber of Commerce might back Moynihan. Sununu reportedly phoned Chamber President Richard Lesher and threatened to ''cut your b---- off with a chainsaw.'' The Chamber did not lobby for the proposal, which went nowhere. Darman, who has built a powerful alliance with Sununu, is the President's chief economic strategist. Baker drives foreign policy. Scowcroft and Brady are trusted counselors who mainly stick to their respective areas of expertise -- defense and finance. But the President knows neither has ambitions beyond making the Bush presidency work, so they are often the last guys in the room before the President decides. Still, Bush has no single guru. He enhances his personal power by sharing information only on a ''need to know'' basis. When Bush sent Scowcroft and Deputy Secretary of State Lawrence Eagleburger on a secret mission to China after the Tiananmen Square massacre, he didn't tell Sununu. When he met with congressional leaders before calling a budget summit, he didn't tell his own congressional aides what he was going to talk about. Though the President drops FYIs to aides, his White House staff has long ago stopped trying to keep track of all his private conversations. Says one aide: ''If the President is making the decisions, the only important thing is that he keeps track.'' At times it seems no decision is too small or innocuous for Bush. During the development of his 1991 budget, he made about 70 relatively micro decisions, most of which would have been settled by staff in the Reagan years. He's often his own foreign desk officer, political strategist, even his own office manager. When Bush discovered that his correspondence unit was 70,000 letters behind, he trotted down to the letter-writing shop to see what the problem was. The pace quickened and the backlog is down to a few thousand. ON MORE substantive issues his peripatetic presence makes for a very personal and unpredictable pattern of decisions. When there is controversy, Bush typically splits the difference. When the steel quotas were about to expire last year, Labor Secretary Elizabeth Dole argued for a five-year extension. Commerce Secretary Robert Mosbacher and U.S. Trade Representative Carla Hills pushed for four with a reassessment after two. Boskin wanted only one, limited to certain product lines. The President asked Porter to propose an alternative. The final compromise was a 2 1/2-year extension for all product lines. When there is consensus, Bush usually goes with it -- but not always. After the Tiananmen Square massacre he bucked his staff and vetoed a popular bill allowing Chinese students to remain in the U.S. Even when he goes with the broad consensus, he often fiddles with the final details at the last minute. He picked the exact dollar-and-cents increase for his minimum wage and federal employee raise proposals. After three discussions with Porter over what constitutes an assault rifle, he decided to propose a ban on all automatic weapons with magazines that hold more than 15 rounds. Accessibility and unpredictability are clever strategies for keeping the opposition off guard. In only 18 months Bush held 57 press conferences, more than Reagan did in eight years, and many on less than an hour's notice. ''How's the temperature out there?'' Bush often asks Press Secretary Marlin Fitzwater. If it's rising, Fitzwater quickly briefs Bush on likely questions. Then he's off to meet reporters. Though wooden in formal speeches, Bush's grasp of detail and zest for competition let him shine when jousting with the press, despite his occasional woolly syntax. Fitzwater has never had to issue a correction, a frequent occurrence with Reagan. Congress has also found it difficult to categorize this President. While Reagan took bold stands but then compromised, Bush focuses quickly on what's possible. Faced with hopeless odds, as in aid to the Nicaraguan contras, he caves artfully and proclaims victory. When he agrees with Congress on the objective -- such as the Clean Air Act -- he works closely with the opposition. When he thinks he can win, as in the case of his successful vetoes, he doesn't budge. Says Brookings Institution scholar Thomas Mann: ''He's a very adept tactician.'' But what about a strategic plan? When reporters bring up the ''vision thing,'' Bush's stock answer is: ''Don't put me on the couch. Don't analyze me.'' Insiders say dealmaker Bush doesn't want to invite criticism or limit his options by defining goals. Outsiders wonder whether he knows what he wants. Brother Bucky's explanation is pure Bush pragmatism: ''I think George would agree with investor Warren Buffett, who says that long-range planning has extreme limitations, especially when it comes to macroeconomic policy. What really counts are the day-to-day things. If you do well in the short run, the long run will take care of itself.'' So far in this Administration, vision is what works today.