Corporate versus Government

I read an interesting blog posting by Dave Snowden the other day about the context and uncertainties of government (opens in new window) in which he writes about the major differences between industrial and governmental environments within the context of trying to apply commercial models of practice to government activities. The article caught my eye partly because I have worked in both the private and public sectors and I think that the appeal of my CV to the public sector is that it contains private sector experience.

There is a view that in the competitive commercial environment, companies are forced to be lean and efficient while government, with no competition, has become large, wasteful, and inefficient. Dave Snowden’s entry talks about these different environments – government needs to be lean, efficient and effective because it is the only one that citizens have:

"Governments face a far more significant set of issues and problems than those faced by industry, and they face them over longer periods of time without the option of bankruptcy. Citizens cannot buy their services from another government, if their own fails. Neither can they insure against the consequences of a catastrophic failure of their state, they have to live with it. In addition Governments, to a greater extent than industry have to consider multiple interactions and interdependencies between initiatives and actions."

I think that most people would agree with Dave Snowden and what is interesting about this article is that it challenges the very tempting and automatic conclusion that therefore, government should apply the same models as used by industry to become the lean, efficient organisation; government’s unique position means many of these industry models are inappropriate. Consider:

1. the level of magnitude and the consequences of government action in comparison with industry
   
2. the fact that government de facto provides it’s [sic] own regulartory framework, while providing those frameworks to industry
   
3. as an entity it carries a burden of responsibility for failure, while industry is constructed on the bases of failure as a market mechanism
   
4. government operates as a unit of one, industry has many units within each market

The question is, then, who is developing government-appropriate equivalents to the industry models that have proven to be so useful there?

Obliquity: delivering value in a sympathetic environment

I have just read an article originally published in the Financial Times (17 January 2004) entitled "Obliquity". What is "obliquity"? Well, that was what I wanted know. Here's how the article starts:

"Strange as it may seem, overcoming geographic obstacles, winning decisive battles or meeting global business targets are the type of goals often best achieved when pursued indirectly. This is the idea of Obliquity. Oblique approaches are most effective in difficult terrain, or where outcomes depend on interactions with other people."

Sounds like an interesting take on strategy setting for businesses so I read on. It goes on to state that "Obliquity is characteristic of systems that are complex, imperfectly understood, and change their nature as we engage with them." Again, I'm interested because it shows an understanding of the concept and nature of complex systems.

From here the article goes on to give some examples of where companies have succeeded when they weren't focussed on profit and others that have failed when they were. Ultimately, though, the article is saying that companies are most profitable when they focus on delivering value to customers and not when they are focussed on turning a profit. This isn't sounding like anything revolutionary to me anymore, just good strategy setting. The reader is then presented with a life-equivalent regarding the pursuit of happiness which has been shown to be a by-product of social interactions and facing challenges that stretch us. Looking at the pursuit of happiness from a business perspective (happiness = profit), you could argue that again, the pursuit here is value to the customer (oneself) rather than happiness in itself.

At this point, I don't disagree with the article and I think that it's an interesting way of looking at business strategy but I don't feel as though I am being exposed to any novel ideas. However, the article then starts to contradict itself in a way. The first is a concession that obliquity is not a business panacea, concluding that on average, a concerted effort to achieve profit will result more consistently in the achievement of profit than the pursuit of some other goal but that those sucesses that do result from an oblique approach will, on average, be greater. This isn't shaping up to be a very sound business strategy, but wait, there's more... The next dent in the argument comes in the form of an example that argues that genes survive not because they want to survive but because they do what it is they do in an environment that happens to favour them over others. So does that mean that this on-average-greater-success is actually a result of sheer chance?

The conclusion that I reached as a result of reading this article was that the wildly profitable business achieves that profit through a combination of focussing on delivering customer value and a sympathetic environment. Well, it held such promise but in the end, right place / right time isn't a strategy that I would hang my hat on. I'll stick to delivering value to customers with a view to making a profit and the law of averages.

Company business plan

Business plans don’t normally grab the reader in the same way as an airport novel does and unfortunately, ours is no exception. Having said that, it is good to understand how/where our funding comes from (this determining who our customers really are) and to find out a bit about the other aspects of the company and what is planned for them. It was also useful to read about the priorities for my department as I could better see where some of the things that I have been asked to prioritise fit in.