At cursory glance, public and private administration seem similar, but a closer look reveals stark contrasts. For starters, they have completely different goals, modes of operation, approaches, revenue sources, accountability, and orientations.
In broad strokes, a public-facing administration manages resources provided by tax revenue and government initiatives to maintain the infrastructure, social community, police force, etc. In contrast, private administration does not answer to the public, but shareholders, and seeks to generate profit— its approach is one emphasising continued growth. As an enterprise based primarily on revenue, this gives it a much narrower frame of focus, and one that can prove beneficial.
While it may seem natural to compare and contrast them and not delve deeper, it is wise to view both from the lens of learning: What can the public sector learn from the private sector and vice versa?
Innovation is important across the board
Management in the private sector has the constant and unyielding onus of trying to generate profit. If successful, this is often beneficial for shareholders and employees. A private corporation needs monetary gains not just to encourage higher growth margins and salary, but also to survive. This constant struggle to generate increased revenue can lead to ground-breaking solutions that breed efficiency and optimization.
The public sector functions differently, dependent upon revenue that is often generated through taxation. Public operations are often urged toward innovation in a different way, because they have to work within the constraints of a budget they often have little control over. Carefully planning and managing budgets and deficits become paramount for a different reason.
One is nimble, the other transparent
In a private venture, the administrator answers to stockholders, not the general public. In doing so, transparency in all dealings can sometimes be murky, as quick action is required for the best outcome with regard to competitors. Lighter governance can equal faster response time when challenges are presented, but as in all things it can be misused. It is important for those in the private sector to maintain steady communication with compliance specialists within their companies, so they can avoid any pitfalls that swift decisions may create.
The public sector is constantly adhering to governance. Compliance paperwork, although quite relevant to the private sector, is mandatory and nearly constant in the public realm. This heightened focus on compliance means that work done in the public sector can become bogged-down with regulatory pressures and a long approval process. Still, accountability is at the forefront of public sector dealings.
Applying the nimbleness and urgency found in private administration to public-facing administrations can produce a remarkably positive result. Public council members that are trained to tackle problems in the same way that private board members do might lead to optimization in public office, and can prove beneficial for the welfare of its relative community.
Where the private sector has room for greater transparency with stockholders and employees, leadership in the public sector has the opportunity to streamline processes so that change is not quite so incremental, while also maintaining a high level of transparency.
A narrowed scope means greater focus
Public administration requires the balancing of multiple issues at the same time. A budget is developed based on the needs of the local community that must serve it in all aspects. The goal is not profit but societal welfare, and that welfare requires approaching challenges from different angles. The sheer scope of demands can prove challenging. The solution can be taken from a page out of the private administration playbook.
Private administration has an incredibly narrowed scope. Two major goals in private administration are connected – shareholder satisfaction and profits.
Public administration must continually account for the welfare of its citizens, which requires depth and breadth to accomplish. However, strategically adopting a situationally (and temporarily) narrowed scope can mean a better response for pressing matters. Just like focusing a lens for a phone: zoom in and then zoom out again in order to cover necessary bases. For example, making the top priority balancing a deficit and turning it into a surplus both fixes the problem faster and allows for additional funds with which to target other issues.
Both public and private administration are laudable professions with strengths and weaknesses. Applying wisdom from both schools of thought can lead to remarkable insight, innovation and progress.
David Barrick is an experienced public administrator within the Greater Toronto Region. For the past 16 years, he has been employed in numerous positions focused on both public and private-facing administration.Write something about yourself. No need to be fancy, just an overview.