Dawn of a Two-Way Exchange: There Are Signs That Good Ideas and 'Best Practice' Are Flowing from the Public to the Private Sector, as Well as Vice Versa

By Beet, Steve | European Business Forum, Summer 2004 | Go to article overview

Dawn of a Two-Way Exchange: There Are Signs That Good Ideas and 'Best Practice' Are Flowing from the Public to the Private Sector, as Well as Vice Versa


Beet, Steve, European Business Forum


The trend towards modernisation and the introduction of best practice into the delivery of public services tends to leave an impresson that lessons flow in only one direction: from the private to the public sector. This is wrong.

I have seen many captains of industry apply their commercial and business skills to the challenge of public sector modernisation, introducing disciplines such as business process re-engineering and supply chain management as well as new structures, such as right-sourcing and the latest corporate governance models.

It is true that these moves have led to advances in the quality of public sector delivery. But in my opinion there are early signs that the flow of good ideas and best practice may be becoming more balanced. Ironically, some of the practices of the public sector engrained in its core structures and approaches--plus a culture and ethos rightly dominated by independence, accountability, transparency, equity and probity are being coveted by leading private sector organisations.

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Policies towards workplace equality, diversity, sustainability and the environment--which have long been at the core of the public sector--are now seen as more than just 'advertising' capital. By adopting equivalent policies private sector businesses can gain real competitive advantage from the rich mix of skills and changes in public attitudes which result.

It is clear to me that many working in the public sector are motivated by a feeling that their actions can directly benefit fellow citizens. Just look at public sector pay levels to see that there is more to going to the office than financial compensation.

The point has not been lost on private sector companies which provide time, space and encouragement for community activities or broader social responsibility initiatives--and have sometimes reaped dramatic results.

The same goes for customers. Many public sector organisations, after all provide focused and targeted services for the most unfortunate and needy members of society--a hard-to-reach group which many private sector businesses now see as an attractive market rather than one to be exploited (say by those financial institutions which specialise in expensive consumer loans). The public sector's years of experience should be an invaluable resource for those seeking entry for the first time.

Public sector organisations, meanwhile, have been notably successful in embedding risk-management techniques into the day-today workings of the organisation, rather than seeing them (as their private counterparts often do) as an 'add-on' to appease the regulators. The wholesale transfer of risk is generally not an option for the public sector; simply blaming the supplier counts for nothing when a core service fails in the eyes of the citizen.

In the private sector, the general trend has been to comply (or at least be seen to comply) with whatever regulatory framework exists, only to seek competitive advantage around the fringes by exploiting loopholes and new structures.

Admittedly, the public sector still has work to do around risk appetite and tolerance, and the acceptance that, in the pursuit of efficient operation, there should be what are politely called 'learning experiences'. Too often, a black-and-white approach to risk management has impeded efficient performance.

One further area of learning are the skills the public sector has developed in managing a wide and diverse range of stakeholders, many of whom lack the direct representation offered through the option of equity stakes as in the private sector. This has led to the development of advanced stakeholder management arrangements and the origins of true balanced scorecard reporting. The complex set of metrics faced by the public sector in meeting an ever increasing and dynamic set of performance targets (operational and political) have been developed by a management cadre whose skills are now coveted by many private sector leaders. …

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