(FORTUNE Magazine) – As CEO of Alcoa for 12 years, Paul O'Neill spent a lot of time giving orders. As President Bush's new Treasury Secretary, he's learning how to be more collegial. It hasn't been easy. In reply to a recent memo from the White House asking the Treasury Department to hurry along some revenue projections, O'Neill scrawled, "What kind of chicken shit is this?" It turns out O'Neill was angry that the memo had been sent both to him and to Andrew Card, Bush's chief of staff.

Corporate leaders often suffer shock when they cross the Beltway into official Washington. They arrive hoping to make government run more like a business, only to realize that everything takes longer, and many things never happen at all. The new boss at the White House, a Harvard MBA, wants to change government's unbusinesslike behavior. President Bush has populated the executive branch with more than the usual number of real, live corporate executives. Significantly, he chose major-company CEOs for three of his most important jobs. Dick Cheney, 60, former CEO of Halliburton, is Vice President; Donald Rumsfeld, 68, who led both G.D. Searle and General Instrument, is Secretary of Defense; and Alcoa's O'Neill, 65, is at Treasury. How well they adapt may answer the perennial question: Can Washington be managed efficiently?

Now hold on, you might say, all three of these guys are old Washington hands. That's true, but the last time Rumsfeld and O'Neill held full-time executive jobs there--Rumsfeld as Gerald Ford's Defense Secretary, O'Neill as his deputy budget chief--was 24 years ago. Cheney--Ford's chief of staff and George H.W. Bush's Defense Secretary--has been away for the better part of a decade, mostly running Halliburton. Even for these three, the transition has been bracing. Corporations care about profits. Government cares about process. Success in business is measured by the bottom line. Success in government is more elusive. "Much that looks like a result really isn't," writes John Trattner in The 2000 Prune Book: How to Succeed in Washington's Top Jobs. "When public leaders think they've gone the last hard mile, crossed the finish line, they often haven't." The President's budget, for instance, is the final product of intense infighting among government agencies. But it's only the beginning of a battle that lasts at least nine months--when Congress completes its work--and the battle is refought every year.

Instead of reporting to a cozy board of directors, CEOs-turned-bureaucrats must deal with 535 often-antagonistic members of Congress. The bulk of their employees can't be motivated or fired. Even Cabinet secretaries have limited authority. "Many things that used to be done outside the White House" by Cabinet departments or agencies, says Professor James Pfiffner of George Mason University, "are now done inside" (by top White House aides like the national economic and national security advisors). Richard Neustadt, a presidential scholar at Harvard, says Cabinet members need to be cushioned "against the shock of discovering that they are not going to be the President's chief policy advisors." At best, they are glorified salesmen for predetermined causes. At worst, they are one among the many pleaders for limited federal largesse.

A survey of FORTUNE 500 CEOs by the Brookings Institution and the Heritage Foundation found that only 21% would consider high government service "enjoyable." The troubled tenures of prominent business leaders in previous administrations hasn't helped the recruiting effort. Two ex-CEO Treasury secretaries had a particularly hard time in Washington: Nick Brady (formerly head of Dillon Reed) in Bush I and Don Regan (Merrill Lynch) of the Reagan years. Both were autocratic Wall Streeters with weak political instincts. Both made too many enemies in the capital.

A notable exception to this pattern was Clinton's second Treasury Secretary, Bob Rubin. His secret, says former aide Gene Sperling, was that he never assumed that his days as co-head of Goldman Sachs taught him anything about being a top government official. (Rubin may also have benefitted from the fact that Goldman was a partnership--and thus less autocratic than most companies--when he was running it.) Rubin surrounded himself with experts on Washington's ways for his entire tenure. "What makes or breaks these guys," says Sperling, "is whether they come to the job with a know-it-all attitude, or whether they say, 'Oh, my God, I'm completely new to this world. What do I have to learn to succeed?' Rubin came with the latter."

James Baker, who won accolades as White House chief of staff, Treasury Secretary, and Secretary of State, insisted on hiring people who had already been tested under fire in government. The reason, says longtime Baker aide Margaret Tutwiler, is that neophytes "were still finding their way around the machinery of the executive branch nine months after we'd been there." Tutwiler is now giving Bush the benefit of her experience, working temporarily (and without pay) as White House communications advisor. Cheney, Rumsfeld, and O'Neill will likely be around longer. Here's a look at how the three former CEOs are faring.

Paul O'Neill should have been a candidate for Best Surprise Appointment to the Cabinet. Few people in the Bush campaign had heard of him before he was selected, but he was superbly qualified. He was an ace CEO who had kept up with the details of public policy since leaving President Ford's budget office in 1977. He had chaired the government-affiliated Rand Corp., served on the board of the American Enterprise Institute, and helped found the Council for Excellence in Government, a group devoted to improving government management.

Nonetheless, he has turned out to be the most erratic of Bush's top picks. In an early interview, he irritated Wall Street traders by saying he could learn to do their jobs "in about a couple of weeks." During his confirmation hearings he flummoxed lawmakers and Bush aides by downplaying the President's strongest political argument for a large tax cut: that it was needed to stimulate the economy (never mind that most economists dismissed that argument).

O'Neill also alienated Democrats by dismissing their concerns that Bush's tax plan would unduly benefit the wealthy. "I think it is really corrosive to have this argument about the rich and the poor," he said. "It's not worthy of where we are in our development as a nation." Such remarks were patently unwise coming from a man who made more than $50 million in pay and stock options from Alcoa last year.

In February, O'Neill sent the dollar skidding by telling a German newspaper that the U.S. is "not pursuing, as often said, a policy of a strong dollar. In my opinion, a strong dollar is the result of a strong economy." Currency traders thought O'Neill was signaling a change from the Clinton Administration's vigorous defense of the dollar. Treasury officials had to deny any policy change to halt the dollar's decline.

These miscues stand in contrast to O'Neill's sterling record at Alcoa. After an exemplary run at International Paper, O'Neill took over what was then a laggard U.S. aluminum maker. He transformed Alcoa into the largest integrated aluminum maker in the world and made it the envy of commodity companies. Its stock price increased more than fourfold under O'Neill. Along the way he reduced a worldwide glut of aluminum by championing a government-sanctioned cartel, and he managed to keep labor peace in part by raising Alcoa's safety standards.

Yet his private-sector triumphs haven't helped--and may have hampered--his performance in the public realm. At Alcoa he indulged his penchant for unconventional thinking and was rarely chastised for it. He pulled Alcoa out of the U.S. Chamber of Commerce when that organization opposed the first President Bush's 1990 tax increase. He publicly excoriated the campaign-finance system as unreasonable and time wasting. He aimed some of his harshest criticism at the U.S. tax system he now oversees. In May 1999 he called it "a hallmark of cynicism and deceit. It is about doing favors. It is about creating special provisions for this thing or that thing.... Can you imagine anyone in their right mind creating the tax system we have today?"

The people who created that system are the members of Congress whom O'Neill must woo to pass Bush's tax cut. They probably will forgive him if he quits playing gadfly and acting as if he's the smartest guy in the room. In other words, he has to stop behaving like the CEO he was but is no longer. At first, some Bush advisors speculated that O'Neill's political antennae had been bent during his years away from government. Now they're trying to make repairs. Bush aides say that O'Neill, to his credit, knows his political skills need improvement.

Dick Cheney is primarily a product of official Washington. He was the youngest-ever White House chief of staff (at age 34), a Republican leader during his ten years in the House, and the much heralded Defense Secretary during the Persian Gulf war. Still, even he was jarred by his sudden return to politics as George W. Bush's vice presidential candidate.

His life as CEO of Halliburton, an international oil-services company, had been lucrative and congenial. He took over the Dallas business in 1995, when it was a middling performer. He quickly buoyed revenues, less by acting as an operating executive than by serving as an ambassador at large. He spent countless days on the road using his contacts to court key players in business and government around the world, especially in the Middle East. "Clearly, one of his abilities was to get doors open," former Secretary of State Lawrence Eagleburger, a member of the Halliburton board, told the Dallas Morning News. Cheney deserves credit for, among other things, moving the company into logistical supply for the U.S. military in places such as Kosovo.

He also saw the need for growth through acquisition. He led Halliburton's $7.7 billion purchase of crosstown rival Dresser Industries in 1998. Cheney used his political wiles to befriend Dresser's CEO, William Bradford. They sealed the deal a few weeks after they went quail hunting in south Texas. The combined companies now compete more effectively against industry giant Schlumberger.

Cheney clearly felt liberated by a burgeoning business career that was making him wealthy. After deciding not to run for President in 1996, he began to speak his mind in a frankly unpolitical way. "We have far too many policymakers who lack any real understanding of what the modern world economy is all about or how it actually functions," he told the libertarian Cato Institute in 1998. All of a sudden, Cheney had become Mr. Business.

But he never lost touch with the capital. Senate Majority Leader Trent Lott tells of getting a call on his cell phone from Cheney, who wanted to discuss the dangers to business of international trade sanctions. More important, Cheney was still a Bush family acolyte, working in a state governed by a Bush. When George W. needed a trusted operator to lead his search for a Vice President, he turned to Cheney, with George H.W.'s blessing. And then, of course, Cheney ended up with the job himself.

At first the Bushes must have doubted their cleverness. Cheney's $33 million severance package from Halliburton was so large by public-service standards that he had to give up part of it to stop the nasty press stories. On the campaign trail, he often seemed like a CEO who didn't want to dirty his hands by mixing with the rabble. Eventually, his political legs got stronger. His hard-hitting convention speech, largely crafted by his wife, was a smash. His wry yet civil debate with Joe Lieberman was a high point of the election. In D.C. he's been a quiet architect of the Bush Administration's relatively mistake-free start.

Unlike other ex-CEOs, Cheney hasn't fallen into the trap of expecting to be in charge. Insiders say he is meticulously deferential to the President and anything but the puppeteer of late-night comedy caricatures. Cheney doesn't run an agency; the office of the Vice President is only about 70 people and is deeply integrated with the rest of the White House staff. Instead, he operates as a trusted Bush aide, sitting in on important meetings with the others closest to the President: Chief of Staff Andy Card and senior advisors Karen Hughes and Karl Rove. Cheney doesn't say much in these sessions. He's still enough of a Washington animal to reserve his most important comments for private meetings with The Man.

Like Cheney, Don Rumsfeld has been around Washington. He also has proven political skills. He was elected to the House of Representatives four times in the 1960s before he crossed over to the executive branch, eventually becoming the youngest-ever Secretary of Defense, at age 43, in 1975. But that hasn't fully protected him from the pitfalls of subservience after a career at the top. One of his so-called Rumsfeld Rules is "The Secretary of Defense is not a super-general or admiral. His task is to exercise civilian control over the department for the Commander-in-Chief and the country." But at his confirmation hearings Rumsfeld seemed to overpromise large increases in military spending. Bush later explained that any serious hikes would come only after a top-to-bottom review of military needs.

Despite the strains and restraints of high government service, Rumsfeld was eager for a return engagement. When Cheney, his good friend and fellow Ford aide, was chosen as Bush's Vice President, Rumsfeld's colleagues guessed that it was just a matter of time before "Rummy" would be back. He is organized, decisive, efficient, a good judge of talent, and an excellent delegator. "Don is a gifted leader with executive instincts and executive talent that he has manifested wherever he's been," says John Robson, a lawyer who worked with Rumsfeld in the government and at Searle.

He honed these traits as Ford's White House chief of staff and at the Pentagon the first time around. "Anyone who could discharge those responsibilities," says James Denny, a longtime Rumsfeld associate, "obviously had the skills to be successful in business." And he was. In 1977, Rumsfeld became CEO of Searle, a floundering, diversified drug company. Over eight years he sold off its nondrug businesses and used his Washington savvy to hasten FDA approval of the company's big earner, NutraSweet. He then sold Searle to Monsanto, made a boatload of money, and left. In 1990 he became CEO of General Instrument, a sleepy electronics manufacturer. Rumsfeld streamlined, reorganized, and focused the business on promising products like set-top boxes and high-definition TV. After three years he took the company public, made another boatload, and left.

Now he's back at the Pentagon, about to oversee the same sort of restructuring that he orchestrated so well in the corporate world. Oughta be a snap, right? Not necessarily. FORTUNE named Rumsfeld one of America's ten toughest bosses in 1980. But top government jobs require considerable finesse as well, and Rumsfeld sometimes comes up short in that department. According to press reports from the annual Conference on Security Policy in Munich in February, he ruffled feathers by asserting that the U.S. would deploy a missile defense system without giving much deference to the dissenting views of U.S. allies. Those wounded feelings will be hard to salve. In Washington toughness is necessary, but not sufficient.

FEEDBACK: jbirnbaum@fortunemail.com