Merging Responsibilities | Saturday January 17th, 2004 | |
By Ronald N. Lanston
National Director, Minority Business Development Agency
(
View the National Director's Biography)
U.S. Department of Commerce
Featured in Diversity Journal Magazine
Public and Private Sector Leadership: The Merging Responsibilities
Today, public management has to a great extent adopted the integration of “private sector” management rules. For example, the Administration of President George W. Bush has initiated the President’s Management Agenda. This agenda includes five government wide management initiatives intended to foster reform and provide a common basis for ensuring accountability among federal agencies: 1. Strategic Management of Human Capital; 2. Competitive Sourcing; 3. Improved Financial Performance; 4. Expanded e-government, and 5. Integration of Budget and Performance processes.
Clearly, under this agenda, the President Bush is placing a high premium on public managers to act, adapt and strategically plan and implement their agency’s goals and objectives pursuant to the best practices of traditional business models. Accountability of public dollars and Return on Investment (ROI) is a critical performance measure and benchmark. Federal agencies are required to justify on an annual basis (as part of the Office of Management and Budget (OMB) process), whether the agency serves a “critical federal role”.
In fact, the performance and budget process has been unified and federal agencies not accustomed to the “outcome” driven ROI and fiscal accountability approach to management, are struggling to adapt. In addition, greater scrutiny from the departmental Offices of Inspector General (OIG), are also fixed on program and performance accountability.
One of the great influences that impacted my view of the public and private sectors and their similarities was an article written in February, 1980, by Graham T. Allison Jr., Professor, John F. Kennedy School of Government, Harvard University, titled Public and Private Management: Are They Fundamentally Alike in all Unimportant Particulars? The article served as a focus for the seamless transition between public and private sector management.
The evolution of public and private sector management focused on their respective cultures of the administrative and the business (entrepreneurial) models. The public and private sectors although culturally different in approach, style, constituencies and bottom line performance measures, are respectively driven by social policy and market share and profit in effectuating service delivery and customer satisfaction. One of the constants that emerged between the two sectors is leadership.
The leadership factor among public and private sectors leaders and their respective policy, budget and management teams is critical to providing efficient, responsive and effective service. Whether you are a CEO of a major corporation or the head of a Federal agency “leadership” is a high predictor of vision and strategic direction. The challenge to public sector leaders, particularly in the federal government, is to adapt to the entrepreneurial business model. At a minimum, public sector leaders must appreciate the new demands (and rewards) for managing public policy within strict budgetary boundaries to produce measurable outcomes.
One of the emerging outcomes of the President’s Management Agenda is that the agenda is having the effect of imposing the same type of fiscal and managerial discipline that historically has been the core competency and expectation of the private sectors and its investors.
During Fiscal Years 2001 thru 2003, MBDA engaged in the process of transforming itself from a bureaucratic and culturally administrative agency to an entrepreneurially focused organization. The new goals and objectives are designed to ensure effective, efficient and responsive services to its client base and performance accountability within the federal management process. The mission of the agency also changed. MBDA would now center on becoming a culture focused on entrepreneurial innovation, committed to minority business enterprise and wealth creation. The core competency of MBDA is to develop and implement “entrepreneurial opportunities for minority business enterprises.”
These initiatives include: 1. Improving opportunities for minority-owned businesses to have greater access to capital; 2.Engaging in national strategic partnerships to leverage internal and external assets and enhance business enterprise opportunities in the market place; 3. Providing electronic access to growth markets by automated matching of firm capabilities with public and private sectors, and advocating an increase in electronic commerce by minority owned businesses, and 4. Improving organizational effectiveness, responsiveness and efficiency through the implementation of continuous improvement strategies, retraining the human resource capital of the agency and greater emphasis on knowledge management, i.e. managing what the agency learns, teaches and archives.
Imprinting the entrepreneurial culture on an administrative culture is a challenge. It is a leap of faith of transformation and reorganizing requiring continuous discussion and training. What is occurring currently (at MBDA) is not unlike what occurs in the private sector. The difference is that organizational change of this nature is not the usual state of affairs in governmental arenas. There is a natural tendency of government (and large private sector organizations) to stay locked in an administrative culture with its propensity for slow evolutionary change driven by controlled resources, risk adverse, with coordinated activities measured by efficiency measures, and the need for clearly defined authority and responsibility.
The entrepreneurial culture is driven by the perception of opportunity, revolutionary thinking, short time-lines, outsourcing resources, flat and informal management links, and strong leader(s) with a “can do” mentality matched by contrariant behavior.
Focusing on the need to react quickly, dynamic with a sense of urgency and to avoid the addiction of acting in the administrative bureaucratic model, requires vigilance, patience and team leadership. Diversity of the leadership class and the management team by skill and experience is equally as critical as diversity by gender, race and ethnicity. The leader and management team must be opportunistic and open to hiring across generational and experience qualifications over a long horizon. Matching the organizational change with strategic choice selection among staff is not a science or art, but should be viewed as essential good business practice. Intergenerational integration of key staff linked to clearly defined performance plans, must be a high management priority.
Organizational transformation is difficult, but not untenable. The leadership factor is essential and the leader must engage in the practice of exercising managerial courage even at the risk of inviting internal or external challenges. Time, history and organizational productivity will be the ultimate judge.
Public and private sector management skill have merged. The President’s Management Agenda is driving the change within federal government to produce outcomes and have a Return on Investment of public dollars. The responsibilities of public and private sector leaders have merged. The Schools of Public Administration (MPA) are wise to teach the skill sets to be a leader/manager similar to the curriculum of the Schools of Business Administration (MBA). MBA schools must teach good ethics, governance, transparency and accountability along side of market share, or profit and loss statements.
It is essential in the age of global economic competitiveness among nations for the public and private sectors to acquire the knowledge and experience on how to attract leaders who can move seamlessly between two sectors and whose responsibilities, skills and expertise will continue to merge in the 21st century.
You are here : Home > FEATURED TOPICS 
