Managing in Public Sector Organizations

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.



Key Points
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.