“All organizations are perfectly designed to get the results they get.”
–Arthur W. Jones
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As keynote speaker, Patrick was biding his time until his turn at the podium and watching the current presenter. The organization’s executive director was about ten minutes into her remarks, and the audience was engaged. Not a passive she’s the boss so we have to listen type of engagement; they were genuinely enthralled by her presentation.
Her message aligned around a single theme: the organization needed to better meet the evolving needs of its customers. Although the organization had a stellar track record and an untarnished reputation, the leaders in the room needed to deliver higher-quality services on time, every time, and at the lowest cost possible. Theirs was a competitive environment, and if they didn’t raise their performance, someone else would subvert their efforts.
In our work with clients, we’ve heard many similar presentations in many other conference rooms. The leader was dynamic, the argument was sound, and the strategy was clear. However, this wasn’t a multinational corporation or a mid-size enterprise trying to reach the next level. The leader who mesmerized her audience was in charge of a government agency.
Her insights were spot-on. She understood that they were living in a world of diminishing resources, increasing scrutiny, and uncompromising demands. She had figured out that the organization was operating in an increasingly pressurized environment, and she was passionately conveying that message so that all in attendance would see and ultimately respond to the emerging environment by thinking and acting more effectively.
The executive director explained that if they did not continue to improve, they would fall prey to a growing number of threats both within the larger government structure (internal) and outside of the government (external). From an internal perspective, other government organizations were competing with them for funding, technology, facilities, and personnel. Although these internal competitors had existed to varying degrees for years, the acceleration level was tremendous. In fact, these competitors were not competing simply for an extra employee or some additional funding; they were trying to take over her organization’s very mission. The other organizations were trying to consume them.
Simultaneously, the external environment was riddled with pitfalls. Contractors were absorbing roles that had once been considered inherently government and off-limits to outsourcing. A wide range of stakeholders—including legislators, businesses, and everyday citizens—were actively questioning and intervening in daily operations. Fueled by a 24/7 news cycle, a staggering number of cable channels, and the ubiquitous nature of the Internet, these stakeholders insisted every mistake signaled an epidemic and required sweeping changes, and that shared mission signified redundancy that needed to be wiped out. Add to these realities increased security as a result of terrorism, a less than desirable job market, and a recovering economy. The organization had never faced an environment like this before. The executive director wanted each of her 300 managers to understand that in today’s world, poor customer service in one part of the organization or a scandal in another could threaten the job of everyone in the room.
Of course, the concepts of competition, increased scrutiny, and growing pressure are not new to the public sector. Consider these examples:
A charity focused on finding a cure for cancer is not the only organization with the mission of tackling this serious health condition. In the United States, the American Cancer Society deals with different cancer types; however, separate organizations tackle specific forms of this disease such as pancreatic cancer, liver cancer, breast cancer, and children’s cancer, just to name a few. The market has been segmented, and organizations are tailoring their messages and approaches. Whether acknowledged or not, these organizations—all with a just and important mission—are pitted against each other. Potential donor pockets are only so deep. These groups must be creative, compelling, and relentless to get people’s attention and garner a slice of the market.
A museum realizes that it is not the only game in town. Other museums are trying to attract the attention of the same patrons and visitors. Perhaps each organization has historically filled its own niche; maybe they even worked together as part of the community. However, as the environment becomes pressurized, each creeps into the other’s space. When a major traveling exhibit comes to town, museums that serve children, science buffs, historians, and art lovers all compete for the same exhibition.
The United States Postal Service (USPS) has dealt with the pressure of FedEx and United Parcel Service (UPS) for years. A growing reliance on email and the cost of operations and employee benefits for USPS as a large federal agency exacerbate the situation. As a result, the USPS posted a loss of $25.9 billion in a three-year period (2011–2013), while experiencing a 5.9 percent decrease in mail volume.1 These numbers suggest an erosion of USPS business, but there is more to the story. Beginning FY (Fiscal Year) 2014, USPS marketing initiatives are driving e-commerce growth and efforts to modernize operations are underway to improve delivery effectiveness.
You might be thinking, But those governments and nonprofits operate more like businesses. My organization is different. We don’t have FedEx breathing down our necks. We fill a vital role that is inherently government and something no one else can do. There is no competition; we are the only game in town.
We invite you to think again.
Consider the city of Sandy Springs, Georgia. Located fifteen miles north of Atlanta, Sandy Springs is a community of approximately 100,000 residents. Like similar cities, Sandy Springs provides a wide range of services to its constituents. Unlike most cities, the vast majority of Sandy Springs’ work is outsourced to private contractors. The entire town has only seven government employees, and the whole Sandy Springs operation “is housed in a generic, one-story industrial park…the people you meet here work for private companies through a variety of contracts.”2
If you apply for a business license in Sandy Springs, want to make a structural change to your home, or need assistance with trash collection, you will work with contractors in Boston, San Francisco, and across the “pond” in Coventry, England. Think this is a one-off experiment that won’t extend to your organization? Consider that the city has no long-term debt and no fleet of vehicles to maintain. While cities like Detroit and Chicago grapple with significant challenges, the first city manager of Sandy Springs, Oliver Porter, met with government leaders in Japan, Iceland, Britain, and the country of Georgia to share the Sandy Springs story. Meanwhile, the current city manager, John McDonough, is producing annual reports with the look and feel of private industry, showing an eight-year winning record and articulating a vision for the future.
Whether you work for local, state, or federal government, volunteer at or run a nonprofit, serve on the board of a charitable hospital, or work in any part of the public sector, competition is present, growing, and intensifying. Yours is a world of competition.
We’re not saying, “Act like a business.” As Jim Collins wrote, “We must reject the idea—well-intentioned, but dead wrong—that the primary path to greatness in the social sector is to become ‘more like a business.’ Most businesses—like most of anything else in life—fall somewhere between mediocre and good.”3 Moreover, your organization’s purpose and the measures of success may be very different from those of most businesses. In your world, it is likely that mission is more important than market share, and service trumps profits. Additionally the inherent challenges of enforcing laws, implementing policies, and ensuring public safety or national security rarely correlate with stellar customer-service numbers—after all, the very nature of your work may cause you and your people to say no. For the most part, customers don’t like that word. Throw into the mix the public sector’s unique constraints associated with hiring, positioning, developing, rewarding, promoting, and—at times—terminating employees, and the concept of acting like a business becomes not just difficult but downright naïve to suggest.
We are saying that to be a truly great public-sector organization, you must recognize the pressures that surround you and proactively