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What We Can Learn from Private Sector Decision Making

In my many years working with public sector organizations, one question comes up over and over again particularly at the more senior levels of government:

How can we be more _________  (fill in the blank with nimble, results-oriented, customer-driven, efficient, or any other adjective out of the MBA vocabulary) like the private sector?

The reason this question makes a lot of sense to anyone coming out of the private sector was best explained by former Secretary of Treasury, Robert Rubin who arrived at the Treasury directly from his leadership role at Goldman Sachs:

“Most people I’ve known in the private sector are just much too accustomed to linear processes where they’re clear decision makers and they make a decision and things more or less then happen. In government, the decisions you make very often are much less direct in their effect.”

Understanding the difference between public and private sector decision-making is fundamental to allowing the tension between public sector best practice and private sector best practice to drive good public sector decisions.

For example, my focus at GovDelivery is on working with our city, county, state, and federal government clients to help adapt best practice communication practices from the private sector to the public sector environment. In the private sector, communication has a linear and measurable objective that is typically summarized by two words: increase sales.

We have seen dozens of innovative companies gain prominence in the private sector by offering different kinds of digital communication products and platforms. Where these products excel is in allowing marketers to target distinct groups of customers and potential customers based on demographics, buying behavior, and previous online actions.

In the public sector, this kind of targeting is too time consuming and presents real concerns about discrimination and privacy. However, by helping our clients understand the benefits of a personalized message, we’ve worked with them to devise ways to offer the public much more choice in what they receive.

This doesn’t lead to more sales (because our clients generally don’t sell anything), but it leads to outstanding and measurable results in other areas such as dramatically more citizens signing up for content updates (what we refer to as “more subscribers”) due to higher level of personalization.

There are many more examples of this phenomenon. What I enjoy about working in the public sector is that there are so many constituencies and considerations that the work we do is complex and often non-linear. We have to be creative in how we learn from our colleagues operating in the private sector and adapt what they do well (drive towards clear goals) to our more complex environment.

If you work in government now and this is frustrating to you, you might be one of the people that former Secretary Rubin was referring to who would be better off in the private sector. Don’t worry though, if you make that leap, we’ll be watching what you do and adapting it, as best we can, where we think it can help do the public good.