Why You Can’t Run Government Like a Business

For years, politicians have been telling us the federal government needs to operate more like a business, but can a private sector leader truly be a great public sector leader? Is the reverse true?

Successful leadership in business or government requires a mastery of communication and negotiation skills, and an ability to engender trust and credibility. But routinely ignored are the different responsibilities and skills required.

When private sector leaders are tapped for government service, they must recognize that different skills are needed for success. The high wire act of learning on the job can be disastrous for both the office holder and citizens.

Jim Collins, author of Good to Great: Why Some Companies Make the Leap and Others Don’t (HarperCollins 2001), wrote a monograph entitled Good to Great and the Social Sectors: Why Business Thinking is not the Answer. It explores the differences in detail. Collins writes that social sector organizations look to the private sector for leadership models and talent, which may be a mistake, “because of the checks and balances that exceed the capacity of private sector leaders in their facilitative leadership capacity . . . Indeed, perhaps tomorrow's great business leaders will come from the social sectors, not the other way around.”

Innovation and Reinvention

At a conference several years ago I was struck by the statistics from a major U.S. corporation that 50 percent of their products had been created in the previous 24 months. This is an astonishing thought to a public sector leader.

As part of a leadership development program called Leadership Matters Rhode Island (created by the Public Sector Consortium and the Pell Center at Salve Regina University in Newport, R. I.) the city of Newport recently re-invented a special permits licensing system. The team was led by the fire chief, who persuaded more than a dozen of his colleagues to join him in a project that required extra work hours and personal time from participants.

The results of their effort will save the city more than $40,000 annually. This was a significant accomplishment for the team and the city, but it also placed a significant burden on the participants. The employees on a government innovation team are not likely to get a bonus or receive recognition for saving taxpayers money; nor will their workloads be reduced if they replicate this process with other systems. If they stay invested it will be because they enjoy the satisfaction of a job well done and doing right by taxpayers.

This is the norm in most public sector workplaces. Contrast this with many corporate workplaces where incentives are structured to foster innovation.

Who Depends On You?

Most private sector leaders know who their customers are and spend millions of dollars advertising and gathering data about what their customers need or want.

While the Obama administration has prioritized improving the “customer experience” of citizens interacting with federal agencies, in the public sector the word, “customer,” is really not adequate to describe citizens or others who depend on agencies for services or information. Every public leader must ask: Who or what depends on me? The responsibility to provide services exists whether or not officials see or hear from citizens. In fact the responsibilities often encompass far more than services, and extend to missions such as environmental protection or scientific advancement. Furthermore, the relationship between public leaders and citizens is designed as a partnership relationship in any working democracy.

These relationships and leadership responsibilities are motivated by very different purposes (profit versus mission accomplished) and require different skills in communication, outreach, negotiation, planning, complexity, HR systems and shared power to name a few.

Worlds Apart

While there are some similarities between the two leadership professions, the differences are profound and the list is long.

For example, public leaders have to contend with an unwieldy bureaucracy and the often conflicting goals of lawmakers who oversee their agencies and approve their spending. They cannot hire and fire at will, but must navigate complex regulations and routine shifts in mission focus based on changes in political leadership. 

On the flip side, private sector leaders live with financial pressures most public leaders rarely encounter. Government leaders rarely have to justify the cost of producing their services and products or worry about making payroll. They don’t usually have to contend with competitors taking over their slice of the market; and they rarely go out of business. 

As someone who has been involved in the private, public and nonprofit sectors, I can relate to the differences. In my experience, the skills needed to be a successful public leader are considerable and often underappreciated. I agree with Collins’ conclusion that being a successful public sector leader is harder than being a professional business leader.

With our current election cycle underway it is a good time to look seriously at the skills needed for successful government leaders. Do we really want executive level leaders learning on the job at our expense?  

Georgie Bishop is president of the Public Sector Consortium.