When people say “be more like the private sector”, I want to cry

A relatively short post for me…. :)

I’ve been having a range of conversations lately and some if not most of them include an odd reference to the public sector budget deficit and how the public sector should be doing more things like the private sector.

Now I’ve tolerated those statements for a while because I know the people saying them don’t mean that we should be more like the private sector generally but expand on this and suggest very specific things such as a particular approach to something or how they invested in X and managed to get a great return on that investment.

However in a general sense, the public sector can’t be like the private sector whilst we still have a vast number of statutory duties to meet (over 1200), equality impact assessments to complete on service changes, effective consultation and engagement activities to conduct and of course managing all of this with a rapidly shrinking budget and with no billionaire investors waiting in the wings to bail us out with no hidden agenda other than maintaining the outcomes – unless you are a person who see’s outsourcing/commissioning as the being the same “bailing out”…for the record I don’t.

I’m not for a second suggesting that we can’t learn from other sectors, nor should we stop trying to reduce inefficiencies where they exist and transform services to deliver better outcomes. That is simply a no brainer now…So a plea – please stop making broad statements like “be more like the private sector” instead be very specific about what it is someone else is doing which you think the public sector can learn from. It would be far more helpful and constructive.

Filed under: Local Government Tagged: change, private sector, public sector, service design, Transformation

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Profile Photo Peter Sperry

The city of Detroit seems to be emulating the private sector lead of GM and Chrysler. A rather impressive list of state, county and local jurisdictions are on track with Chapter 9 bankruptcy filings similar to the Chapter 11 filings we see every day in the private sector. The Federal government regularly emulates private sector leaders such as Enron, Lehmann Brothers, and Delphi. It actually would be kind of hard to see how most goverment jurisdictions could be more like their private sector counterparts.

But I am sure we will try.

Profile Photo Richard Gay

Carl, I agree whole heartedly with your ending statement about how one should be very specific about what they mean when they say government should be more like the private sector. I’ve served in the military and worked in state and local government as well as a brief stint in the corporate world for 36 years. What I find frustrating about my counterparts and peers in government is their risk aversion. I’ve prided myself in always looking at how I deliver my services and then looking for better ways to deliver those services. It doesn’t matter to me where they come from or who thought of it first. I look for where the efficiencies are and then I measure and quantify the results and publish my findings. Normally it falls on deaf ears. Many of my peers prefer to continue to do it the same old way even though their is no law or regulation at any level of government that would prevent them from adopting a more efficient delivery system of their services. I have even been told that if they follow some of these initiatives they’ll loose their jobs! Now my experience in the cooperate world taught me that you had to either make money or save money for the company. This can be translated in the government as creating efficiencies in one area so their are resources to utilize in another and thereby not having to increase the budget and the tax burden on the public. That is the attitude of government officials that needs to change. We don’t need to become private industry, but we do need to adopt efficiencies when we see it and free up resources when we can.

Profile Photo linda perry

The Patent Office budget has been hit by sequester, but no employees are being furloughed (I am not sure about supporting contractors). We are fee-based, which is a “private sector” model which would not work for the more unpopular services, like the IRS, or the ones designed for predominently less affluent “customers” , like VA, but it would be an interesting experiment to ask the public in a limited pilot for fees for service where it makes sense and find out whether the services are valued by the general population.. Regarding billionaires, Congress raises funds for their re-election, and one prominent billionaire descended on DC and said he ought to pay more taxes (but did not write a check on the spot as one I think journalist asked). Could one task somebody with fundraising for the govenment, pointing out that some people became billionaires by selling to their own citizens and now are contributing to foreign countries, when their duty lies here? Every winter we have months of fundraising for charity at the office, (combined federal campaign) which is great, but again, charity begins at home.

Profile Photo Jon A. White

I am often astonished by those who suggest, in all sincerity, that government should behave like private enterprise. Really? While there are certainly lessons from the private sector that may be applicable to the public sector, these lessons are not nearly so pervasive as many proponents of this idea may think. The private sector is fundamentally undemocratic – and for good reasons. Private sector entities tend to be autocratic and have narrowly focused missions. By contrast, the purpose of government is laid out, in very general and fundamental terms, in the Preamble to the U.S. Constitution. The purpose of an entity in the private sector is – to make money. Period. When push comes to shove, that is all that counts. Celebrate the benefits our society gains from both a broad, inclusive public sector and the creative dynamism of the private sector.

Profile Photo Bryan Conway JD, PMP

1) When I say that I’d like to have the public sector be more like the private, it is in terms of customer service, a sense of urgency, and being “profit” minded. In other words, at least pretend that it is possible to lose your job if you don’t take care of your customers! Treat your customers like shareholders (they are, in a sense) and imagine how you would act if there was an imaginary competitor could take your market share and run you out of business.

2) The City of Detroit did not emulate Big 3 business practices – it emulated Big 3 UAW practices. Large tax revenues from autoworkers allowed a bloated administration (3 times as large as comparably sized cities), cronyism (the hiring of friends and family instead of talent, the awarding of costly service and construction contracts to friends and family), and excessive entitlements were huge factors in Detroit’s fall, not private sector business practices, which were nowhere to be found.

Profile Photo Carol A. Spencer

I think Richard Gay hit the nail on the head. I spent 11 years in private industry, have been a government employee for 20 years, and served in elected office for 10, four as a mayor. “We’ve always done it this way” with no incentive to change is a problem. My first year as mayor, I told every department head I was cutting their budget by 5% unless they could justify in writing why I should give them what they had the prior year. Only one department head provided a written report, and he justified an additional percentage… which he got. I wanted them to think through everything they were doing to be sure it was being done in the most efficient manner, to think about investing today for long term improvements. That’s one of the things the private sector does well and government generally does not.

When people say (and I said it in my campaigns) that we want government to run more like the private sector, we want government employees to be innovative in their thinking, positive in their interactions with the public, always thinking about ways to improve service delivery. We want to be able to demote or fire those who refuse to participate in improving and enhancing service to our citizens. We want to eliminate the insidious attitude of “I was here before you were in charge. I’ll be here when you’re gone. So, I can’t get excited about the changes you want because the next mayor will probably want something different anyway.” That attitude will easily get you fired in the private sector. Not so in the public sector.

In looking for public sector to be like private sector, I think the public is looking for the cream to rise to the top, and to see, feel that positive, can-do attitude pervasive in the public sector, even without the profit motive to drive it.