When you put public sector and entrepreneur in the same sentence it is tempting to think of tenderpreneurs or corrupt officials running businesses on the side. This article highlights the emerging idea that the public sector needs more entrepreneurial and innovation skills to keep improving service delivery and making the business of government work.
With government taking on responsibility in many countries to run key services – it has created what is known in economics as quasi-markets. The basic idea of a quasi market is that while government is running a specific service – it needs to remain as efficient as if regulated by market forces.
The basic idea in the quasi-market is that government purchases bulk services on behalf of citizens, while there are private providers that compete for the same business. In order to be effective both the public sector and the private sector effectively compete for the same “business” while providing a public backbone that serves the needs of the masses.
The quasi market model is often used in housing, electricity, health-care, insurance and increasing in areas such as security, education, retirement services, publications and the host of other services that government gets involved in.
A quasi market often leads to a situation in which government has a relative price advantage while the private provider has a relative quality advantage. In order to equalise between the have’s and the have not’s – this type of model is employed more often in critical needs areas with a view to letting the market become strong enough over time to make the need for government to intervene less.
Many predict that the future of government in emerging markets are fundamentally changing to essentially provide these types of parallel economies that serve people that cannot afford in order to protect basic human rights and social security – while letting the markets regulate normal supply and demand. This type of quasi-market economy, which is prevalent in most of the developing world, requires innovative policy, strong legislative oversight, effective regulators and entrepreneurial skills to make it work. The quasi market approach has the benefit of protecting against market failure while having the benefits of competition and choice. In markets where this is not feasible there will be classical state run organisations and additionally increased regulation of the private sector.
The devolution of control in government to a unit or departmental level has seen a massive increase in the need for entrepreneurial and innovation management skills in the public sector. It is seen that an entrepreneurial Head of Department takes risks, backs hunches, creates and seizes opportunities. But they must also be a motivator and leader, creative resource investigator, communicator and ambassador, while at the same time possessing a clear vision, objectives and strategic plan. All this happens in the context of strong controls, checks and balances and public accountability.
The entrepreneurial role is then generally seen in four parts:
- the characteristics needed to fulfil the role;
- the competence to evaluate activity in the external environment linked to a market awareness, and
- the ability to develop and manage a flexible, innovative organization, and
- finally, the organisational skills to link the strategy and the execution to the required socio-economic value for the participants.
The entrepreneurial manager needs the ability to scan the external environment to spot and take advantage of opportunities for the institution while ensuring that the ideas selected for implementation provide a good “fit” with the mission of the institution itself. This type of socio-economic opportunism is required to identify and mobilise the required resources to fulfil the needs of people – which is often labelled service delivery.
Public servants that have a good understanding of the needs of business and the ability to run public sector organisations on business principles are rare. Increasingly there is a need for leaders to learn the high-level business skills that allow for effective delivery, while having to transplant these ideas into the framework of regulation and the complex world of politics and public administration.
Yet, a public sector organisation gets judged on the same service parameters as all other organisations. These days it is not uncommon to speak to a (efficient) government call centre and to get statements and updates via web-based interfaces and new technology.
So what are the ideal characteristics of a successful future government employee that leads others? Combining the results from several respondents an some surveys the top characteristics seem to include:
- Self awareness
- Highly ethical
- Master listener
- Ability to communicate
- Ability to execute on promises
- Inspiring followers
Compare this to the list below that is typical characteristics of an entrepreneur.
- Tolerance of ambiguity
- Ability to convince others
While these are not the same there is a similar spirit in that both are positive, committed individuals that inspire others to move forward. The entrepreneur and the public servant is motivated by a vision and the reward follows from there.
They also both drive innovation. Innovation requires someone that understands what the parameters and non-negotiables are and to ensure that actions put in the required frameworks for innovative delivery – without flouting regulations and practices.
Entrepreneurs can also learn from public servants – as the types of solutions that get created in the public sector often is focused on being comprehensive and to address the root of the problem. Moving beyond basic opportunism and looking at all aspects of a solution seems like a luxury for the entrepreneur – but it is essential for an institution that will stand the test of time and judged by the public.
While it is tempting to think of the public sector as an ineffective mechanism for social delivery, we must realise that globally many people are inspired to serve others as public servants.
The quasi-market structure that is a common trend in governments worldwide seems to dictate the need for specialist management and leadership skills in government that draws from effective business practices.
Public servant leaders need to have more in common with entrepreneurs and create new models and frameworks for delivery that is based on innovation, risk management and sustainable development.
Entrepreneurs can also learn from governments who must be concerned with executing their solutions for the long term and balancing costs with social impact.