How often are government projects geared to make a profit? Not often. In the past few months, though, we have heard of an inordinate number of for-profits government endeavors as many of the healthcare exchanges are required to carry their own weight. Therein lays one of the challenges. When people who have never worked in a for-profit company are chartered to run one, their world is turned upside down. Their measures of success are not the number of people covered, mouths fed, and roofs over heads, but rather revenue, expense, cash flow, and profit. It is a different, less compassionate world that is unforgiving of financial overruns. This is not to say that public projects have less of a fiduciary responsibility, but the focus on the use of the money is different. Therefore, if a project to house homeless is 20% over budget, but houses the people it should, it is often considered successful. In the private sector, there is not necessarily a pot of cash to meet that 20% overrun. Scope may need to be cut to deliver a positive result.
On one recent visit to a government agency that had a six million dollar overrun on a project that delivered three years late and had over a thousand bugs on release, I asked "Would we be sitting here is the system had no bugs?" The answer came quickly, "No." The budget overrun and delay were not worthy of investgation, only functionality. Try that excuse with your private sector boss.
Periodically corporate leadership changes, but not with such predictability, public influence, and political process as with the public sector. Every two to four years the public has the opportunity to change the government's direction. This fosters many behaviors that we do not contend with in corporate life.
- Waiting it out: In hopes that the next election will bring new direction. Elected officials who disagree with a direction have the ability to procrastinate and drag out projects. Just the fact that they can delay its delivery, gives them the fodder that the project is "running late and behind schedule," building their political platform.
- Continual questioning: In a democracy, decisions never seem to be final. Repeatedly questioning direction in a corporate setting can get you fired. In the government, it can get you re-elected. The ability to create and sustain roadblocks to success is far easier in the public sector.
- Uncertainty. Even people with the best positive attitudes who work in an environment where there is daily questioning of the direction and uncertainty looms over your project destroys morale. Politically contentious projects create this atmosphere.
These factors reduce the public sector project effectiveness, increasing their costs, and delaying their deployment.
What gets you up in the morning? Is it your goal to achieve new heights or make it a day closer to retirement? Although a rash generalization, incentives for most government positions are rooted in the beliefs of the sixties—working at the same job for life. Long-term, tenured employees are good, but only if their goal is to better the organization and, in turn, grow themselves. Marking time and concern over rocking the boat in order to get your pension does not help projects move forward.
Many of us live in a democracy. It is not the ideal place to get something done. Too many people have to be pleased. In our oligarchic corporate world, we do not have the joy of democracy. In well run companies, however, we are blessed with decisions and directions. When they are wrong, the company disappears. In a corporation, mismanagement's reward is failure. Only recently have we seen municipalities fail; taxes usually keep them afloat. The difference is that in a democracy there is no CEO. Decisions are made, votes are cast, and still the majority of the population can disagree and fight the decision—again, impeding progress.
Project transparency is a great thing—in moderation. Baring your soul to the world, though, is a little much. Corporations have a level of secrecy provided to private individuals. Public sector projects must be transparent since the money funding them belongs to the public. The result is a risk-averse culture frightened of ending up on the newspaper's front page or the nightly news. The fear of public humiliation nearly paralyzes any attempt at innovation, borrowing corporate's tried and true processes, and even decision making.
Money is not everything, but as Daniel Pink has taught us, you need to pay enough to get money off the table. Government jobs are notoriously lower paying jobs that do not attract and retain the correct proportion of best of the best. And, when they do show up, they are quickly drawn away into the higher paying corporate world.
Yes, government projects seem to fail at a disproportionate rate due in part to multiple factors that make them different from corporate projects. There is no data, though, to prove they actually run worse. As opposed to the corporate brethren, public sector projects run in the light of day, hence, every hiccup, glitch, and misstep is in full public view to be criticized by every armchair quarterback. As leaders, our job is to look at the failure modes and determine how to mitigate the risk in our projects—whether they are public or private.