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Government as Business?

There has been encouragement over the past twenty-five years to manage government like a business, but there are some characteristics that do not translate. Anyone who has worked in both government and business can attest to the fact that these two sectors are hugely different and, in many cases, what works for one will fail miserably in the other.

To say the least, local, state and federal government is not as nimble as business. Comparatively, change occurs at a glacial pace in government, whereas in small business the velocity of change is embraced and new products are quickly calibrated to consumer desires and capricious markets. I think of government as ‘pre framed.’ For those of us who have joined a city, county or state government as new employees, the government and agency structure existed long before we became part of the workforce. For good or ill, new employees inherit structure, policies, and protocols that were most likely in place for decades. In political science, these entrenched systems are typically termed, ‘folkways’ and define how things are done in each venue. Are these inherited systems highly adaptable to forces of change? Hardly. Joining a new business start-up is a far different proposition than joining county government.

The concept of strategic thinking in public agencies is not new. Creating mission statements, identifying a vision, establishing goals, and formulating general strategies and specific actions are common elements of most plans. However, contemporary strategic thinking and planning for public agencies requires an entirely different perspective. Public agencies exist to provide services; they do not exist to generate profit for stockholders. They do not compete for markets and do not experience the win-lose environment of market competition. Some would argue that public enterprise agencies do indeed exist to generate profit; I would respond that these agencies are not competing against other service providers and additional earnings above operating costs must not far exceed the cost of providing that service or citizens would soon protest.

Ideal readers of this blog understand that government exists to serve its citizens, to provide a framework for society, to ensure the desired level of public health, reasonable public transportation, safe roads, clean water, disposal of wastewater and solid waste management. It exists to protect communities against harm caused by natural or man-made disasters, crime, or social injustice. It educates our young, provides national defense, and ensures some level of security for the disadvantaged and elderly. Above all, we expect public employees to maintain the essential foundation of society, allowing citizens to pursue that elusive and very personal prize we term ‘quality of life.’

During the past thirty-five years I have had the pleasure of evaluating hundreds of strategic plans prepared for city, county, state and federal agencies. Most are marginal at best. While this sounds judgmental, the genesis of my perspective has its roots in the variety of plan formats, language, and content I have seen. Most are merely aggregations of activities that are improperly termed ‘goals’ or ‘objectives.’ Many mission statements are actually visions or statements of values. Most plans provide a collage of good intentions without a clear data framework that leads to a point of departure for actual implementation and measured performance. Is this observation too harsh? Not really.

Many books on strategic planning were written by business writers who have tried to convert business planning language and process to public administration. While many terms, such as mission, values, goal, and objective seem immune to errant interpretation, this is not the case. Some variations are subtle, others are very different. Frankly, there is enormous value in standardized language and process that properly represents the challenges faced by public employees in public agencies.

Much of a manager’s effort must now be dedicated to public sector strategic thinking and planning. My book, Planning the Future, is dedicated to elected public officials, professional administrators, senior and middle managers, supervisors and employees who in so many profound ways are responsible for the future of our communities. It describes a fundamental future planning perspective that is unique to government. It is a process founded on identified issues and challenges, clear data, projected outputs and desired outcomes. It relies on sensible measurement and calibrated performance with a commitment to five basic operating parameters – efficiency, effectiveness, quality, productivity and cost.

2011 brings a new year with renewed promise and opportunity, but also ushers in new challenges, with budget shortfalls, eroding infrastructure, declining immunization rates, climate change, costly wars, lost programs and decimated services. This year will be difficult for many public agencies. Stimulus funds have been spent and additional funds are unavailable. States are on their own – isolated by the mere fact that they alone are accountable for balanced annual budgets. Years of expansion have dulled the ability of many managers to effectively conduct meaningful triage at a time when elective reductions are essential. And, many budding challenges were sown with promises that could not possibly be kept.

Strategic thinking must emerge as a new, more appreciated creative process. There are answers to the questions. But, understand going in that none will be easy and 2011 begins an era of sacrifice and prudent contraction.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His new book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, was released in October 2010. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).

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2 Responses

  1. I mostly agree with your observations. Governents are not business, at best they could be nonprofit business.
    Businesses are capitalism, their only goal is maximizing the profits of their owners. Governments are social, they must look for all those that are not “owners”; and also for the owners.
    So, it is a competition, governments MUST limit the wealth of the owners and distribute wealth to assure those owners that there will not be a bloody revolution, among other things. Governments are “socialistic” by definition.
    It is sad that everybody in America is looking forward to a “reduced” future; is this the good-bye of the dream and of America as a world leader, like happened to the British Empire? If that is the case, the American Dream had a short life of around 50 years (1950-2000). Let’s start learning Mandarin.

  2. Insightful distinction between private and public sectors. No successful business regards strategic planning as frivolous or meaningless. The best-run businesses have insightful vision statements and goals that make sense. The same principles need to be applied to the public sector–perhaps more now than ever. Public sector leaders have to look to the future and make viable strategic plans that implement correct daily activities that will remedy future challenges.

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