Don't Compromise!

In the second of our ‘Q&A’ style interviews, we talk to John Best – former CEO of Milton Keynes Council – about his personal experience of and reflections on comparisons between the private and public sectors (including their unhelpful stereotypes of each other, and their attitudes to L&D), and what organisations of whatever sector might usefully learn in – and for – the future. John’s answers to our questions are shown below: you can also read a brief biography and his responses to the Don’t Compromise Personal Learning Profile.

Q1 Having worked in both the public and private sectors myself, it strikes me that both sectors hold stereotypical preconceptions about each other, their cultures and ethos – and preconceptions that don’t stand as much scrutiny as they may once have done. Having ‘crossed the great divide’ yourself, would you agree? If you think there are real misconceptions here, how valuable do you feel it would be to see them addressed and corrected?

A1 There undoubtedly are significant differences between the two working environments and these may be rooted in the difference between needs and demands. The public sector, and the democratic part of the public sector in particular, is there to identify and meet the unmet needs of those least able to articulate what they want. Doing it “well” thus constitutes being able to dig down into society and make life a little better for those who might not otherwise show up. And in the public sector ethos, the concepts of Rightness and Transparency are paramount.

In the other world, the private sector, there is no operational “given”, no constraint or limit on what you should – or should not – be doing. It’s all about Possibility, and finding energetic ways to create, develop and harvest new markets. It’s all about creating and meeting demand, rather than identifying and meeting need. I don’t believe that the private sector holds the public sector in high esteem, nor do I think the public sector understands what the liberal market feels like. More opportunities to travel between the two sectors would help both greatly.

Q2 Although Ipsos-MORI’s Annual Veracity Index shows that we actually increasingly trust our civil servants, my general impression is that the last couple of decades have seen pride, faith and trust in the public sector eroded. Partly, this is political: we are living in the era of ‘rolling back the state’, or at least rhetorically doing so – while prospects in 2010 may be different, evidence tends to contradict rhetoric. But we do seemed to have moved from an era when public service(s) was/were respected to an age where it’s now fashionable (or even de rigueur) to belittle them. Why do you think this has happened, and how do you think public sector leaders and managers can address these common perceptions?

A2 For decades, public services were allowed to operate with very little challenge. These days there is not only more accountability of individual services and service providers, there is also contestability in deciding the means to deliver. Even in the UK, public services no longer need to be delivered exclusively by public sector organisations and some of my current work is looking at models of community elsewhere whereby local services, local governance and local accountability are made the responsibility of exclusively private-sector, profit-seeking organisations.

Any UK analysis also needs to recognise the components within the public sector: we have had 20 years of centralisation in which local discretion is held back from, or even taken away from, local public sector organisations. Simultaneously, the powers of centralisation have pretended to support local discretion by imposing (generally non-democratic) local structures – such as health trusts or school governing bodies – responsible for delivering services locally. The result is a world full of language that alludes to customer choice and thus seems more market-friendly, when in fact the structures are becoming less and less transparent and local consumers have less idea about who is offering them what (although there is still the widespread assumption that local authorities do it all).

This is in contrast to the best of the market, in which private sector brand leaders like Virgin or Apple are increasingly recognised and loved by their loyal customers. The route forward for local public sector leaders is to vigorously promote a family of services branded for the public sector “owner” even though delivery will increasingly be through private sector organisations delivering services that (at least in an economic sense) can be commoditised, while delivery is locally branded.

Q3 I’m thinking of a quote from Charles Handy, who – writing about the not-for-profit sector – said “Social enterprises put their purpose before their profit while recognising that profit is essential to their survival and growth; it is, as they see it, a tax on the present to pay for their future. More conventional businesses may one day begin to see things the same way.” In terms of commitment to purpose, corporate social responsibility (to use a dread phrase, but to imply also acting in the context of a wider world of which they are only part), and committed employee engagement – something that struck me strongly during my time in the public sector (clichés aside, many people do work in education or social work primarily because they truly care) – what lessons do you think the private sector can learn here from its public/not-for-profit counterparts?

A3 We have to distinguish between what is Right and Fair on the one hand, and what is Profitable and Affordable on the other. UK businesses are often criticised for taking a much shorter planning horizon than their European counterparts. A lot of UK politics, national as well as local, also takes a far too short-term time horizon, generally dictated by electoral structures. That is certainly the case in Milton Keynes, where partisan politics facing elections almost every year has shown itself well-nigh incapable of unpopular medium-tern thinking in the face of electoral pragmatism.

Both groups should spend more time and energy in two future timeframes. In the medium-term, tangible improvements in outcomes can be achieved despite short-term unpopularity. For a business, that unpopularity takes the form of deferred returns on investment and the costs of that investment; for the democratic public sector, it takes the form of opinion polls and votes, with resulting shifts in the control of power (unless, of course, the responsible political unit can persuade the electorate of the merits of deferred gratification).

The other time frame – and it is an increasingly dominant and topical one – is the long-term, populated particularly by issues of sustainable behaviour and climate change. Because the stakes are so high, society is going to impose carbon-related policy reviews. Politics and public sector organisations will do their best to persuade electorates that this was their idea. It should have been. Private sector organisations will take this long-term view only where they recognise a financial incentive. Few commercial organisations will sacrifice their profits for a social objective and it may be left for new institutional forms of social enterprise or Community Interest Companies to lead the way

Q4 A related question. With the rise in outsourcing, of public-private partnerships, the introduction of more ‘business-like’ use of performance targets, budgets and internal markets, the public sector resembles the private sector far more than it did at the start of my working life. What other lessons do you think the public sector could learn from the private sector? And what, if any caveats, would you apply to protect values and culture while changing processes and practices?

A4 There is a clear benefit in harnessing for public service delivery the energy of the commercial sector. PPPs (Public Private Partnerships) can do that but, in so doing, they unleash some other dysfunctions.

Not least of these is the cost of capital: public bodies with an excellent covenant can get access to low-cost capital, whereas private organisations (particularly if they are fuelled by venture capital) face costs of capital that are three, four or even five times higher. And that`s before they have met the additional demands of shareholders for dividends and profits. Private organisations will also not always understand the vagaries of working with political players, though this knowledge can be acquired through practice.

The greatest asset that private organisations can bring is their flexibility: a set of values in which they can mobilise immediately if something is good to do, whereas public sector organisations must tackle embedded practices, consultative processes, transparency of decision-making and interference in many forms.

Having said that, everything that a private sector organisation can bring should be deliverable equally in a public sector organisation … in theory. The swingeing analyses of system and processes that a lean process review can bring can identify extensive areas of “waste” as much in private as in public organisations. The difference lies in the nimbleness of the two kinds of organisation to implement change, as well as the need in democratic public sector organisations to retain some transparency of processes in order to be able to fulfil its democratic remit.

Q5 Moving from one to sector to another (even between industries) is a cultural challenge for anyone, and the famous change cycle model applies to everyone. Hand on heart, what aspects of working in the public sector do you miss, and which aspects of the private sector are you finding the most welcome – and the most challenging? And would you recommend the move to others?

A5 Speaking personally, my shift out of the public sector (and it has not been total, since much of my current work still involves collaborating or communicating with the sector) has coincided with a move out of the institutional world into one of small-scale – even individual – enterprise. That de-institutionalisation has been a separate, parallel journey with implications as least as great.

So I miss the organisational support that an institution provides – in offering legal advice, personnel advice, technical support, flexibility of available resource. Within my city, Milton Keynes, I miss having a compendious knowledge of what`s been happening and what will happen next. Stuff can now more easily pass me by and, understandably, far fewer people feel they need to talk to me before they take a position. On the other hand, I have much more freedom to pick and chose what I do, which causes I espouse or evenings I work, what gets in the local press (much less!) and when I can travel. S, I don`t miss the ethos of the public sector because I still work according to an ethos of my choice – which I`m sure reflects much of my long time in the public sector. I benefit from the lifting of constraints, rules and processes that beset democratically led organisations, and would whole-heartedly recommend the move to others.

Q6 Recent surveys on employee engagement and recruitment tend to show that the coming generation are seeking different rewards – different sources of satisfaction – from working life. Now that the ‘job for life’ has gone (although the public sector may still offer more of a career structure?), they tend to seek ‘softer’ elements beyond just pay: a working environment that encourages learning and development, for example. What implications do you think this brings for both sectors, and which do you think will find it easiest to meaningfully respond.

A6 I think good practice in managing and motivating people is likely to apply across all sectors, not just one. The coming generation, whatever work they do, will need flexible and transferable skills that will in turn draw them towards in-career learning, multiple skilling, the ability to innovate and work across professions or specialisms.

I suspect the private sector will always have the edge over the public in innovation and rapidity of response, and will therefore attract people who thrive on that. The public sector will attract people who wish to remain embedded in their community, and are thus affiliative and want to belong. So there will be a tendency for successful private organisations to offer dynamism and innovation; whereas successful public organisations will offer multi-technical, person-oriented integration.

Q7 Learning and development central to ASK’s work and – we would vehemently argue – to every organisations. From your own observations, how do practices and the degree of commitment to staff development differ between the sectors and what strengths and weaknesses does each demonstrate?

A7 My perception (albeit possibly influenced by the move into a much smaller-scale organisational setting) is that the private sector expects individuals to take greater control of their own skill-development, whereas the public sector collectively expects to encourage people to constantly develop themselves. This is also borne out by the tendency for educational organisations (such as Universities) to offer their staff significant and regular sabbatical absence to pursue their fields.

I think both sectors will see extensive in-career, work-based training programmes that can combine relevance to work settings with reduced cost of unproductive absence. There may thus be a pattern of convergence between the two

Q8 We’re coming to the end of the first decade of the 21st century. To quote a popular sci-fi series, “The twenty-first century is when everything changes. And you’ve got to be ready.” How should leaders and organisations – public and private – be preparing, and what do you think the biggest changes are going to be?

We have long had science fiction writers who seduce us with semi-realistic pictures of futures we can barely contemplate. I think our contemporary shift is toward a greater and more widespread realisation that accelerating change is upon us: changes in the first half of the 20th century were greater than the previous 200 years; changes in the last 20 have been greater than the previous 40 years, and the pace shows no sign of letting up.

Organisations are realising they need to reserve time for reflection and strategic review. To cope with rapid change, they need to unlock their structures and the experts within their structures. The predominant societal shift is in communications, media and gadgetry that can unlock radical remodelling of customer-service interconnection. We have been promised personalisation of services for decades – but while services are adapting, they are doing so at nowhere near the speed at which technology is enabling potential change. So services are falling further behind what is possible.

The next consumer tsunami will be triggered by technical unlocking of individuals’ capacity to define what they buy, use or enjoy. And it will certainly not be led by any public authority, central local or international. It will be triggered by clouds and we all, whatever our sector, will struggle to keep up.

Add to: Facebook | Digg | Del.icio.us | Stumbleupon | Reddit | Blinklist | Twitter | Technorati | Furl | Newsvine