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Government Leader home > news stories
08/11/06
IBM survey: Government stepping up use of private-sector business models
By John L. Guerra
Special to Government Leader
Government leaders are increasingly finding operational success through collaborative relationships with the private sector, a global IBM survey of public- and private-sector CEOs shows.
“Organizations in the federal government see the broad innovation in the private sector, especially innovations in business models,” said Nicole Gardner, vice president of the public-sector global innovations team at IBM’s Global Business Services. “Government leaders more often use private-sector business models to achieve efficiencies and productivity.”
Most interaction with the private sector has historically originated from the hiring of consultants and academics, but government leaders are beginning to embrace companies and other commercial entities for their innovative ideas more often.
The IBM Global CEO Study 2006 shows how public-sector leaders have put other entities before consultants. The survey demonstrates that the public sector gets ideas from, in descending order: academia, business partners, employees, consultants and think tanks. “Citizens and customers figured at the bottom of the list,” Gardner said.
On the other hand, collaboration reaches the commercial sector through company employees first, followed by business partners, with customers in third place.
Government leaders would be even better served if they sought ideas and suggestions from their “customers,” the report says. “Government leaders could greatly benefit from sourcing more new ideas from the outside, and increasing the depth and scope of collaboration with others, especially citizens and constituents,” according to the report.
This collaboration with customers can take the form of agency Web sites and close contact with the public. “A shift is underway from ‘inform, consult’ to ‘engage, collaborate,’ ” the survey says.
An unidentified government respondent in the survey put it this way: “Governance is instilling in staff a citizen/customer-centric approach. Our culture and behavior must change to align with this philosophy.”
As in other things, Gardner said, the government is adapting innovations at a much slower rate than the private sector. “The government has gone through evolutions like this before,” she said. “But there’s a lag. For instance, pay for performance is only now beginning to be transitioned to the government sector. At the Defense Department and Homeland Security Department, there’s as an ongoing exchange of ideas and concepts; but the government lags the commercial sector in many areas.”
“Though government sees collaboration as a big fuel, they don’t do the things they need to do,” she added. “While there’s input from academics, consultants and employees, they don’t look to the ultimate party that’s impacted—the public.”
Gardner cited the Federal Aviation Administration as a case in point. Though FAA can provide commercial airlines statistics such as arrival/departure timeliness, number of bags lost and so forth, “they don’t reach out to general aviation pilots, the people who fly their own planes,” she said.
Gardner admits that though there’s been a move to business-like professionalism in the federal government the past several decades, a lot more customer-centric thinking must be adopted. “Though there’s an influx of people in government who are more business-minded, with business degrees and a business perspective, it’s still a challenge for government leaders to adopt innovations quickly.”
She pointed to the Postal Service as perhaps the most commercialized of the government entities. “The postal service evolved to ensure they’re serving citizens better,” she said. “You could only buy stamps at the post office, but now you can buy them at kiosks in the mall, online and at grocery stores. Ten years ago, you had to go to the post office.”
Turf wars and legacy IT systems hamper efforts by the public sector to implement technology to streamline the delivery of services, the survey indicates. Almost 90 percent of respondents in the public sector agree that the integration of business and technology drives successful innovation, while 49 percent say they’ve mastered this critical element.
The creation of separate silos—one for technology, the other for business plans or service delivery—make the melding of agendas, resources and outcomes difficult. Change and innovation don’t happen in a silo.
“Innovation is about execution and results,” Gardner said. “Idea generation is really only the beginning. You have to have a catalyst that says current course and speed aren’t enough, whether it is budget constraints, or changing market conditions such as those brought about by terrorist attacks, tsunamis or hurricanes.”
That’s good news, because government respondents to the IBM survey say they anticipate a significant level of change over the next two years. “Combine that with the budget constraints we are facing, and you have a pretty strong case for change,” Gardner said.
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