The Public Sector Entrepreneur – a New Type of Leadership

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:

1. the characteristics needed to fulfil the role;

2. the competence to evaluate activity in the external environment
   linked to a market awareness, and

3. the ability to develop and manage a flexible, innovative
   organization, and

4. 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

• Authenticity

• Reputation

• Highly ethical

• Master listener

• Ability to communicate

• Optimism

• Ability to execute on promises

• Inspiring followers

Compare this to the list below that is typical characteristics of an
entrepreneur.

• Self-belief

• Tenacity

• Passion

• Tolerance of ambiguity

• Vision

• Ability to convince others

• Flexibility

• Rule-breaking

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.

Conclusion

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.