Posts Tagged ‘results’

Running Business Like A Government: There’s A Lot That Government Does Right. The Private Sector Ought To Take a Few Notes

Tuesday, May 12th, 2009


If there is a bright side to this economic meltdown, hopefully it’s that people gain a new appreciation of what it’s like to manage government. I couldn’t help but chuckle when one of the failing bank CEO’s was brought before Congress and asked what he did with the multi-billions of taxpayers dollars his company had received. He seemed genuinely outraged that anyone would dare ask how the money was used.

The CEO’s outrage turned to indignation when one of the congressmen had the nerve to ask the dreaded “but-for” question. The congressman simply asked, “Could you please tell us how many more loans you have made since you got this money?” To which the CEO exclaimed that it was impossible to keep track of funds separately and that no one could possibly separate these dollars and show the direct impact those specific dollars achieved.

Really? Because that’s what we do in government every day. I remember a colleague of mine who had to fill out four different time sheets every month because his time was split across four separate programs and grants, each of which demanded full accountability for time, money and results. What the bank CEO said was impossible is actually business as usual in government. So rather than giving you advice on how you can help improve government, I thought we would take some time to gloat and perhaps reflect on what we do really well.

Here’s what government can teach businesses about their operations: (more…)

Profit Sharing in Government: Motivate Your Employees By Giving Them a Stake in Your Success. Just Don’t Try to Do it With Money

Tuesday, May 12th, 2009

helping-handsLast month I wrote an apparently controversial column called “Greed is Good.” (Thanks for all the “fan mail.”) In it, I tried to make the point that government does exist to make a profit; it’s just not measured in dollars. Profit is the outcome or result measure for the private sector. To say in government that we are not here to achieve a profit is akin to saying we are not here to achieve results. Try opening with that one at your next appropriations hearing.

For government, profit is measured in far more important things like quality of life, a clean environment, healthy kids and a vibrant economy. The point of my previous column was that we should be as focused on delivering these results to taxpayers as the private sector is on delivering profits to investors. Once we recognize we are here to achieve a “profit,” we’ll be better able to communicate our value to investors, develop innovative alternatives to achieve more profit — and finally, share our profits with employees.

How could we make profit-sharing work in government?

Let me start with how not to do it. The typical way we have interpreted profit-sharing in government is to give monetary rewards to employees. Borrowing ideas from the private sector, we have tried numerous ways to incentivize employees with money — a merit increase, a pay-for-performance-scheme, a “keep part of the savings” incentive, rewards for offering ideas. These programs have had limited success for a couple of key reasons. First, they are expensive and rarely survive a budget crisis. Second, they are built on some pretty strong assumptions: Namely, that you can motivate people, and that you can motivate them with money. (more…)

Greed is Good: Making a Profit Doesn’t Always Mean Making Money

Tuesday, May 12th, 2009


Greed is good?

Last fall I had just completed a workshop about the concepts in my book We Don’t Make Widgets when I was approached by one of the participants. She said, “Look, I get where you are going with this: We do have widgets and processes; we have customers; we should try to improve our operations. But” — and I knew exactly what was coming — “you just can’t run government like a business.”

In my most sympathetic voice I said, “I understand your feelings. When you say we can’t run government like a business, which aspect are you are most concerned about?”

Her body then contorted and convulsed, like someone who’s been told they have a bug on them. “Businesses are so … so … greedy,” she said. “All they care about is profit.”

“Exactly,” I replied. “Now imagine if we were as greedy about profit as the private sector. How great would that be?”

The look on her face said what I’ve heard a thousand times: “We’re not here to make a profit.” Except that we are. It’s just not measured in dollars.

In the private sector, the performance outcome is obvious — money. We in the public sector are here to achieve a profit also, but it’s shown in the form of results. As I contend in my book, the purpose of any organization is to maximize return to its investors by building better widgets for customers in more efficient factories. Investors? ROI? Customers? Have I lost you? Let’s step back.