Hawaii Agricultural Development Agency (ADC) - Raising the Phoenix - Reconstructing-Repurposing Government - Making the Impossible Possible
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The document discusses the differences between public and private organizations, arguing that government should not be run like a business due to their distinct missions, accountability structures, and operational environments. It highlights the need for different leadership traits and skills in public organizations compared to private ones, emphasizing the impact of political influences and the challenge of instilling efficiency and innovation within governmental systems. Furthermore, it suggests that improving performance in state-owned enterprises requires transparency, accountability, and a focus on merit-based management to better meet both financial and social objectives.
![We did the work better and faster; we also did it cheaper. The efciencies saved money that could be
shifted from supporting mission to doing mission.
Q: Is it possible to make government more efective even as there is a question about what its mission
is?
It's getting very complicated, right? One unfortunate factor is that government does a really bad job of
letting the public know when it actually can be useful or helpful. It is reactive, instead of being
proactive. Personally, I’d argue, let’s give the government a chance to deliver the service better. That
said, I understand government is resistant to change, so making it more efcient and efective is
challenging.
Why don't shared services happen? For the public sector, the downside of failure is bigger than the
upside of success. Agencies are reluctant to cede control even of non-core functions for fear that it
would somehow hurt its core functions.
Government is hugely hierarchical. There's a culture that doesn't ask people to perform in an
entrepreneurial way. If I, as a government bureaucrat, try something really hard, and I'm wildly
successful, somebody shakes my hand and says, “You did a good job.” But if I try something really
hard, and I screw it up, my career is derailed. It's disproportional. It's a disincentive for taking chances.
Even though I push people to change, I also appreciate why they might not want to.
Q: Where do you think we should focus to make progress?
Ideology gets in the way of thinking about better government. It's ironic, in a way: there is an
ideological divide over what the mission of government is—over what services and functions
government should actually deliver. Yet don't we all think that whatever government does, it should be
efcient, efective, and deliver on its mission in the least costly way possible?
___________________________
IMPROVING PERFORMANCE AT STATE-OWNED ENTERPRISES
By Arief Budiman, Diaan-Yi Lin And Seelan Singham, McKinsey & Company
May 1, 2019
<https://www.mckinsey.com/industries/public-and-social-sector/our-insights/improving-performance-at-state-owned-enterprises >
[O]ur research and experience show that notwithstanding the constraints of the public-sector model
and the tough economic times, these enterprises can signifcantly improve their performance.
Too often, state-owned enterprises operate behind a curtain, revealing little information beyond their
general mandate. One reason may be that their objectives are unclear or conficting, but the lack of
transparency can also be traced to political expediency, a desire to avoid comparisons with the private
sector, or inexperience with clear, concise corporate communications. Leading state-owned
enterprises can openly proclaim their objectives and clarify the trade-ofs between their fnancial and
social goals when they negotiate a transparent mandate with the government and other stakeholders.
In practice, that kind of transparency involves explicitly establishing fnancial objectives as the primary
goal and setting both aspirational targets and minimum expectations, such as covering the cost of
capital.
The leaders of state enterprises must not only have the freedom to pursue these explicit objectives
but also receive support publicly. Once everything is in place, communicating the new fnancial targets
and the moves that will be used to achieve them ofers three signifcant benefts.](https://image.slidesharecdn.com/hawaiiagriculturalagencyadc-raisingthephoenix-reconstructing-repurposinggovernment-makingtheimpossib-210924000306/85/Hawaii-Agricultural-Development-Agency-ADC-Raising-the-Phoenix-Reconstructing-Repurposing-Government-Making-the-Impossible-Possible-3-320.jpg)
Hawaii Agricultural Development Agency (ADC) - Raising the Phoenix - Reconstructing-Repurposing Government - Making the Impossible Possible
- 1. Phoenix Rising – The Golden Compass Phoenix Rising – The Golden Compass RESTRUCTURING & REPURPOSING THE HAWAII AGRICULTURAL DEVELOPMENT AGENCY (ADC) Achieving Excellence – Leading by Example Changing the Governmental Purpose Nothing is Impossible Can Government Be Run Like a Busin THE CYNICS & NAYSAYERS Five Reasons Government Should NOT Be Run Like a Business? By Seth Harris Deputy Assistant to the President, Labor & the Economy; Deputy Director, National Economic Council,The White House April 15, 2019 <https://www.linkedin.com/pulse/fve-reasons-government-should-run-like-business-seth-harris> Government should not be run like a business. Public organizations are qualitatively diferent from private for-proft businesses. As a result, their leaders may need diferent traits, skills, and behaviors to succeed. How are public organizations and private for-proft organizations diferent? First, public organizations are owned collectively by the people of a political jurisdiction through their government. Private for-proft organizations are usually owned by individuals, families, or groups of individuals directly or through, for example, partnerships, public companies, or employee-owned enterprises. So, leaders in public and private organizations must be accountable to, and communicate efectively with, diferent kinds and numbers of owners. Second, their missions are diferent. Private for-proft enterprises maximize their profts. They may have secondary missions, but they won’t last long if they don't make money for their owners. Public organizations, on the other hand, have no interest in profts. They generally provide “public goods and services,” in many forms, and usually for free. Diferent kinds of leaders may be needed to accomplish these diferent missions.
- 2. Third, public and private for-proft organizations operate in diferent environments. All organizations pursue their goals by drawing resources from their environments. Private for-proft enterprises draw resources from markets : capital from capital markets; workers from labor markets; raw materials from commodities or product markets. They sell their products or services in a market in competition with other providers. Money from sales is reinvested, or taken as proft. Public organizations draw their resources from politics . Government collects taxes, and tax revenue is allocated through a political process to public organizations. These organizations spend the money to deliver public goods and services demanded through a political process. Elected or appointed government ofcials make these decisions, not markets. As a result, public organizations are sufused by politics and surrounded by infuencers: stakeholder groups, other public organizations, the press, political parties, customers/voters/owners, and others. Politics does not play a similar role in the private sector, so public leadership is necessarily diferent. Fourth, structures and processes are diferent in public and private for-proft organizations. With limited exceptions, private-sector entities have great fexibility to improve their performance by adjusting how they conduct business or changing the structure of their organizations. Generally speaking, a private-sector CEO can sell, modify, or abolish a division of his or her company, as long as the board of directors goes along. If the manager of a corporate division declares all meetings will be 15-minutes long, and everyone who is able must stand up (a great idea, by the way), there is nothing to stop her. For public organizations, many structures and processes cannot be changed. They are dictated by law, regulation, or someone else’s political power. Fifth and fnally, the people who populate public organizations are diferent in important ways from those who work for private for-proft organizations. Good evidence suggests public organizations attract employees motivated by public service or the content of their public jobs. Money may not be their principal motivation, although economic security and work-life balance are relevant to some, perhaps many. Thus, motivating and leading public employees requires diferent strategies, and perhaps diferent kinds of leaders. ____________________________________________________________________________ THE MOVERS & SHAKERS Can Government Be Run Like a Business? Management In Practice By Jesse Samberg Shared Services Fellow, IBM Center for the Business of Government Yale School of Management, April 27, 2018 <https://insights.som.yale.edu/insights/can-government-be-run-like-business> In the private sector, the proft motive drives change, efciency, and innovation. The government is a very diferent animal. It has to respond to all kinds of diferent, competing interests, including political considerations. But my career has been spent applying business ideas to the government, in the context of these competing interests. We decided to look at increasing the overall efciency of the organization. We did that by fguring out which parts of each agency was unique and which functions were shared. For the shared functions, we created a Business Service Center. That is a typical organization for shared services. It streamlines the transactional pieces without taking away decision-making power from the people who should have it. The Business Service Center in New York City was roughly a decade ahead of the rest of government in the United States and stood up what is now known as the most comprehensive public-sector example of shared services in the country.
- 3. We did the work better and faster; we also did it cheaper. The efciencies saved money that could be shifted from supporting mission to doing mission. Q: Is it possible to make government more efective even as there is a question about what its mission is? It's getting very complicated, right? One unfortunate factor is that government does a really bad job of letting the public know when it actually can be useful or helpful. It is reactive, instead of being proactive. Personally, I’d argue, let’s give the government a chance to deliver the service better. That said, I understand government is resistant to change, so making it more efcient and efective is challenging. Why don't shared services happen? For the public sector, the downside of failure is bigger than the upside of success. Agencies are reluctant to cede control even of non-core functions for fear that it would somehow hurt its core functions. Government is hugely hierarchical. There's a culture that doesn't ask people to perform in an entrepreneurial way. If I, as a government bureaucrat, try something really hard, and I'm wildly successful, somebody shakes my hand and says, “You did a good job.” But if I try something really hard, and I screw it up, my career is derailed. It's disproportional. It's a disincentive for taking chances. Even though I push people to change, I also appreciate why they might not want to. Q: Where do you think we should focus to make progress? Ideology gets in the way of thinking about better government. It's ironic, in a way: there is an ideological divide over what the mission of government is—over what services and functions government should actually deliver. Yet don't we all think that whatever government does, it should be efcient, efective, and deliver on its mission in the least costly way possible? ___________________________ IMPROVING PERFORMANCE AT STATE-OWNED ENTERPRISES By Arief Budiman, Diaan-Yi Lin And Seelan Singham, McKinsey & Company May 1, 2019 <https://www.mckinsey.com/industries/public-and-social-sector/our-insights/improving-performance-at-state-owned-enterprises > [O]ur research and experience show that notwithstanding the constraints of the public-sector model and the tough economic times, these enterprises can signifcantly improve their performance. Too often, state-owned enterprises operate behind a curtain, revealing little information beyond their general mandate. One reason may be that their objectives are unclear or conficting, but the lack of transparency can also be traced to political expediency, a desire to avoid comparisons with the private sector, or inexperience with clear, concise corporate communications. Leading state-owned enterprises can openly proclaim their objectives and clarify the trade-ofs between their fnancial and social goals when they negotiate a transparent mandate with the government and other stakeholders. In practice, that kind of transparency involves explicitly establishing fnancial objectives as the primary goal and setting both aspirational targets and minimum expectations, such as covering the cost of capital. The leaders of state enterprises must not only have the freedom to pursue these explicit objectives but also receive support publicly. Once everything is in place, communicating the new fnancial targets and the moves that will be used to achieve them ofers three signifcant benefts.
- 4. First, transparency helps to create accountability, which can force government ofcials to keep their commitments, particularly if problems arise. Second, it can boost public support for the changes, which is especially important if political support is tenuous. Finally, it puts pressure on the internal organization to deliver. In addition, state enterprises must not only focus their portfolios of social, nonfnancial initiatives in order to deliver meaningful results to key stakeholders but also communicate those results. Public scrutiny—and therefore the pressure to deliver quick results and avoid missteps—is intense. Executives must choose their targets carefully. To emphasize urgency and plow through the bureaucratic inertia that's common in state enterprises, it will often be necessary to establish special, CEO-sponsored teams that can bypass unnecessary management layers. To help focus on high-priority areas, leaders at state companies must also examine noncore activities and assets and, wherever possible, terminate, franchise, outsource, or shed them. Divestment of public assets is politically sensitive and usually requires approval on many levels, but executives have found creative ways to expedite the efort. State companies fnd it difcult to attract talented people and to motivate the high performers they already have because the environment is perceived as staid, hierarchical, and bureaucratic. Since career progression is often based on tenure rather than performance, employees with leadership skills may see little reason to shine. Another critical element for developing and retaining talented leaders is to intensify performance management. Meaningful rewards and consequences must be based on merit, not tenure. For many state companies, removing underperformers is challenging, but these employees must face consequences if organizations are to build cultures based on superior work. State-owned companies that redefne the talent proposition can't forget the current staf. Tenured employees with substantial job security often become less motivated, especially if a company has lost some of its public standing and proftability to more dynamic private-sector competitors. Despite the obstacles, state-owned enterprises can match the private sector's performance standards and even become world-class players. A clear mandate, an intense focus, and a workable talent strategy can bring quick results. Chief executives at these companies don't have to wait for governments to take the lead. They already have the tools at their fngertips.