Managing in Public Sector Organizations
Exploring the Challenges
Imagine doing a job with a multi-million dollar budget, employing thousands of staff, and making a huge difference to your community and even the nation. These are some of the reasons many people seek out a career in the public sector.
However, there are also some huge challenges that public sector managers have to face. For instance, public sector staffing budgets are usually set so far in advance that there's no flexibility to reward outstanding performance with pay bonuses.
Urgently needed changes may have to wait for approval by multiple committees and levels of management. You may have to meet performance targets that are based on political promises – such as reduced waiting times for certain services – and these may conflict with the real needs of the people you serve.
If you work in the public sector – and, especially, if you've recently moved from the private sector – how do you overcome the unique challenges? In this article, we identify the major differences between managing in the public sector and managing in the private sector, and we show you what skills you'll need to succeed in the public arena.
Understanding the Public Sector Environment
What exactly is the public sector? In short, this term covers the services and facilities that the government delivers to the public, and for the public good. It involves things like national parks, public works, taxation, national health agencies, education, defense, and other government projects and agencies.
Unlike private companies, the purpose of the public sector is not to make money. Instead, it exists to serve the needs of citizens, who pay for the services through taxation. This important difference underlies many of the challenges the public sector faces.
Unique Public Sector Challenges
The very nature of the public sector creates unique challenges for public sector managers. Here are some of the key issues they face:
- Motivation can be difficult – In the public sector, salary is often tied to the number of years a person has worked in an organization – not to performance. In some cases, this can cause some staff to do the minimum while ‘working their hours,' without really caring about serving ‘customers,' or doing their jobs well. Also, because public sector positions tend to be fairly secure (it can be difficult to fire someone), staff may be less motivated to excel, because they're not worried about losing their jobs if they perform in a mediocre way.
- Organizations may resist change – Because of their large size and their layers of bureaucracy, it can take years to implement change in public agencies – even on a small scale. This slow progress can frustrate a forward-thinking manager. Also, because many agencies are so large, decisions often need approval from several different executives or committees. This can sometimes hold initiatives up, or even bring them to a halt.
- Staffing is often inflexible – In the private sector, companies usually control how and when they hire and fire. For example, companies can create new jobs if they find bright stars they want to hire. In the public sector, however, it may take a year or more to create a new position – and a job opening may take months to fill. Some managers can overcome this by hiring temporary workers, but this can cause another set of problems with loyalty and pay raises. The fact that staff turnover is so low may contribute further to teams' resistance to change.
- Budgets are set far in advance – Because the public sector is funded by tax revenue, budgets are often created the year before, and they tend to be very strict. It's difficult to get approval for additional funds, and many departments are underfunded or understaffed. Also, spending isn't related to revenue, like it often is in the private sector. For instance, if a company's sales increase, it can hire more warehouse staff to meet the demand, because the extra revenue will pay the additional salaries. But if a public agency's caseload suddenly increases, its fixed budget probably doesn't allow the option of hiring more staff.
- Workplace cultures can be strict and bureaucratic – Public sector cultures are often highly bureaucratic, with an emphasis on following the rules. This can cause a lack of flexibility when approaching any out-of-the-ordinary situation.
- Issues are often more significant – Problems addressed by the public sector –such as health care or education reform – may affect millions of people on a broad level. This may create overwhelming workloads, and the feeling that there are never enough people – or hours in the day – to do everything.
- Elections often determine leaders – The public sector often has leaders who are elected or appointed. This means that the person at the top isn't necessarily the most qualified or experienced for the job. On the positive side, this could lead to some creative innovation, because the person may have a new viewpoint or different set of experiences. But, on the negative side, the wrong kind of political appointee could lead to wasted time and resources – and even costly mistakes.
- Stakeholder management is key – Any public sector manager will be expected to have expert skills in stakeholder management. To get their job done, public sector managers will need to build effective relationships with an extensive range of external stakeholders – including the general public, voters, elected representatives, pressure groups, and unions. When someone new is elected to a senior role, this requires the public sector manager to draw on his/her stakeholder management skills and experience to establish a new relationship.
- Trust matters – Many private sector managers rarely think about whether the public truly trusts their product. In the public sector, however, a bad manager can reduce or destroy public trust in the government through corruption, incompetence, or backward progress – and this may have lasting consequences on local or national society.
Necessary Public Sector Skills
Succeeding in public sector management takes a combination of patience and determination. If you switch from the private to public sector, you may easily feel lost or disorientated because the culture is so different.
These skills might help you do well as a public sector manager:
- Think creatively – Although you might not have the budget to offer your team a pay raise, you'll need ways to incentivize your staff. Public agencies usually have strict rules on compensation and rewards, so you'll have to be creative. For example, some private companies may seek product donations to reward their team, but this is often illegal in the public sector. Obviously, you can't reward for high profits or increased sales – but you could base rewards on other metrics, such as lower error rates or higher productivity. Also, learn what your team members' values are. People who work in public service probably care about the public good. Try to base your rewards on what they think is important, not just on what you think they would like. Read more about rewarding your team.
- Be ready to negotiate – Because public sector organizations often have many layers of bureaucracy, managers must be able to negotiate and compromise with others to get things done. Have clear objectives, and be willing to trade with others to reach a common goal. Also, keep an open mind about the aspirations and motivations of others. Learn more about negotiation and compromise.
- Learn to make good decisions – Many public sector agencies don't move forward because they can't make decisions. Ideas or plans often need approval at many levels, and this can frustrate managers, and cause them to walk away from decision-making responsibility. In other words, people may not make decisions, even when they're authorized to do so. This, of course, leads nowhere. Successful public sector managers need the courage to make decisions, and they must recognize that forward progress is vital. Without decisions – and action – nothing meaningful will get done.
- Share information – Public agencies are often connected with one another – and if they're not, they should be. Think about how upsetting it is when a police department, a hospital, and a school find out that they could have avoided a crime against a child if they had just communicated with one another. Be willing to share your resources and information (within your legal limitations).
- Have patience – Public sector bureaucracies can be large, and you must work within the system if you hope to get anything done. This shouldn't discourage you from trying to implement changes – but if you always like to be in control, then working in the public sector may not be for you.
Lessons From the Public Sector
Private sector leaders can learn several lessons from the public sector:
- Focus on values – People in the public sector often feel that they're a part of something bigger than just the job they do as individuals, and this can promote a strong culture of value within the organization. What could you do to create a culture like this in your company? Perhaps you could begin by identifying your team's values, and then basing your rewards on those values.
- Keep your staff longer – Consider the length of time many government workers stay in their jobs. We pointed out earlier that public sector pay is often based on the number of year years someone has been on staff – therefore, many people tend to stay with an agency longer. As a result, they can pass on their significant experience and knowledge to newer team members. As a private sector manager, how could you motivate and inspire your staff to stay with your company for longer?
- Serve a good purpose – Your company may sell a product or service, but that product or service probably wouldn't exist if it didn't help people in some way. Focus on your customers first. What can you do to make their lives easier? How could you improve their experience with your company? Even for-profit organizations have the power to improve people's lives.
There are clear differences between the private and public sectors. Private sector companies have complete control over their organizations – and even the largest companies can usually make strategic decisions faster than public agencies. The bureaucracy in public sector organizations often makes progress painfully slow. The key to managing in the public sector is creativity and courage. Keep your team motivated and feeling valued, and learn to make good decisions in a timely manner.