Homeland Security Watch

News and analysis of critical issues in homeland security

June 6, 2013

Public and Private Cultures: Context, concepts, communication, action

Filed under: Private Sector,Risk Assessment,Strategy — by Philip J. Palin on June 6, 2013

I recently completed a homeland security project with a significant private-public element.  I have begun the assessment process and intend to include a personal note on the issue of “cultural tensions” between the private and public sector.

Following is the first of an expected three or fours posts where I am trying to think through my impressions.  There are empirical findings, but the data can reasonably be interpreted in a variety of ways.  We are left with analysis or interpretation or persuasion.  I would very much value your feedback.  What seems sound and what sounds wrong?  Given your own experience of private-public engagements, what are your questions or alternative answers?

Clearly this is radically reductionist.  At best this is an effort to identify some helpful heuristics.  At worst — well, heuristics are always double-edged.

–+–

Perceived Context as a Source of Cultural Differentiation

I am the son and grandson of grocers.  Over the last three decades I have not been employed by an organization I did not create or co-create.  I have worked with various public sector entities and have been compensated for this work, but I have never been employed by the public sector.

I have never been employed by a large organization of any sort.  I have been a consultant to large organizations, but my professional home has typically been an enterprise of 10-to-40 persons.  Very early in my career I was part of a  global consulting firm of a few thousand, but we were organized in mostly independent small offices and teams.  It was a much looser arrangement than I encountered among our Fortune-100 client-base.

I share this personal background because it no doubt influences the following findings.  As my Dad often says, “We are who we are because of where we were when.”  Our understanding of context influences every other understanding.

Fundamental to private sector context is failure: competitors fail, customers fail, colleagues fail.  Start-ups fail.  Market-dominating firms are killed off in a couple of CEO-cycles.  I have mostly failed.  Even when the organizations I have created have continued they have never achieved what those present at the beginning envisioned.

Private sector culture anticipates failure.  Hitting 300 is very good, especially if you are regularly up to bat, even more if you can hit when the bases are loaded.   Knowing that failure is likely you look for back-up opportunities, maintain exit plans, and cultivate an ecology of opportunity.  Many private sector enterprises use failure much as an organic farmer uses waste to fertilize the next generation of crops.

This is because the U.S. private sector is heavily oriented toward growth.  Good growth from a minority of successful initiatives will more than cover the losses generated by failures… especially failures that are brought to an early demise.  Know when to hold them and when to fold them.  Walking away from failure at the right time — and learning from the failure — is a key characteristic of the most resilient private sector enterprises.

As an outsider looking in on the public sector I do not perceive this creative anticipation of failure plays a similar role.  Rather, avoiding failure seems a regular characteristic of public sector clients and colleagues.

This may be related to a lack of growth opportunities within the public sector.   In an essentially static resource context failure is seen as waste rather than exploration or innovation or investment.

There is at least as much diversity within the private sector and public sector as between them.  The US Coast Guard and the Navy Chaplain Corps are among the most entrepreneurial of organizations I have had the pleasure to encounter.  Education and training organizations are — weirdly — often the most bureaucratic regardless of their private or public status.  I have watched up-close as proud private sector brands have stubbornly avoided taking reasonable — much less market bending — risks.

But as a general rule, public sector organizations are loathe to fail.  In some cases it is precisely the prospect of imminent failure that generates “growth” opportunities for the public sector.  Just when the private sector would probably be walking away is when the public sector is tempted to double-down to ensure success — or at least avoid failure.  The public sector too often succumbs to this temptation.

The temptation to avoid-failure-at-all-cost is reinforced by the way public sector failure is framed (in a couple of meanings of the word) by the media and elected officials.  There is a cult of personal accountability that practices a cruel liturgy of public humiliation.

For the private sector failure can also come with considerable personal costs, but it is balanced with upside possibilities.  In the public sector the outcomes of failure are heavily weighted toward all-costs and almost no incentive. Culturally the private sector has mythologized reality as a space/time where possibilities abound, failure is temporary, and the universe is expanding.  The mythology of the public sector is much more a matter of light and dark, success or failure, and the universe is static.

–+–

Next week — maybe — the operational concepts that emerge from these alternative contexts.

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8 Comments »

Comment by William R. Cumming

June 6, 2013 @ 7:58 am

Interesting post Phil! Disclosure: AS a second generation civil servant my private sector experience consists of mowing lawns, delivering newspapers, summer camp couunsle and since retirement operating the Vacation Lane Group, Inc. as a nonprofit entity and one not tax exempt although it could be one.

I am interested in your paragraph that follows:

“This is because the U.S. private sector is heavily oriented toward growth. Good growth from a minority of successful initiatives will more than cover the losses generated by failures… especially failures that are brought to an early demise. Know when to hold them and when to fold them. Walking away from failure at the right time — and learning from the failure — is a key characteristic of the most resilient private sector enterprises.”

I wish that statement were true. I find the private sector largely spending its time trying to survive and exploit nuances of regulation and if not regulated corrupt practices and fleecing of the sheeple.

But hey I am a fuzzy headed liberal always hoping for a better world.

And in the meantime I wish to dispute some of your analysis of the public sector and its organizations. Many civil servants at all levels of government are just trying to creditably do the jobs on relatively low pay and support assets.

At the hightest levels of government I found preservation of the organization to be a full-time occupation for some and conducting bureaucratic warfare against other organizations or those with legitimate oversight of the civil government sector.

For example, IMO I found FEMA when independent to be a large shcock absorber between DoD and the other civil agencies including DoJ. Reports from DHS indicate it has now assumed this role.

Well despite what some may think Federal programs, functions and activities do in fact end and die. It is only skeletal remains that exist.

In a recent length conversation with a GAO staffer on the duplication and overlap team they personally entirely agreed with me that even GAO does not have the ability to undertake that report because the Executive Branch is either skillful or incompetent in tracking and metrics and performance measures. And of course OMB operating on behalf of the President knows full well that government programs are political solutions to problems and not designed for either efficiency or effectiveness.

Yet in my 30+ years of federal service I had great fun delving into authorized vacuums and trying to fill in gaps. Usually leaving behind a pile of work for others far more competent than I to implement.

And yes as many thought or stated on the record I was that most feared civil servant a bureacratic entreprenuer but in my case with the end of benefiting the American people or at least I hoped so.

Comment by William R. Cumming

June 6, 2013 @ 8:51 am

Perhaps a further discloaure by me is warranted! Invariably my explanations to my superiors of what I was doing and why breought them to my point of view. Some of this support went to the very senior most rands of the civil service. Often even in DoD and DoJ and DoE and EPA. After losing out on the GC position in FEMA based on the selection of another who literally belonged to the right clubs and I belonged to none during the period of Acting Director Robert Morris I did apply for other SES legal jobs outside the agency. Runner-up to the insider in 2 of the 4. But in fact I was trusted by almost all the appointees in my agencies and senior civil servants. Largely because I was willing to take on thankless activity or doing a turn around on some federal activity.

But my impact on the private sector was not without consequence. One example, prior to civil service [actually during] I was familiar with the importance of generators to the military. Then in about 1984 the CO and President of LILCO was hammered for not returning home from overseas to deal with a major energy disruption from a hurricane on Long Island. At that time all private secttor and public sector energy companies absolutely opposed generators as standby equipment to be owned and operated by the general pulbic. PART of their concern was disruption when the power came back on normal transmission lines.

In late summer 1986 I was assigned the $12B case of the Shoreham Nuclear Power Station before an ASLB of NRC. Atomic Saftey Liscensing Board. I became familiar with LILCO officals and suggested since unrelated to the case they encourage standby generators. They became advocates for such on Long Island.

Then after Hurricane Andrew struck in 1992 I again asked by a PAS in FEMA whether FEMA could provide generators to State and local governments. I answered of course. Knowing that orally the PAS had been told in strict terms not to do so. I also stated that I would be happy to defend my position in any quarter or before OMB and Congress. With the the PAS ordered the first supply of generators in FEMA history.Andrew was 1992 so it might have been HUGo in 1989.

This purchansing and supply of generators by FEMA in large quantities stimulated privat enterprise to fill that demand and now it is a largely established industry with worldwide sales and profits. YUP! Taking almost full credit. Somewhat ridiculous I know. But hhey butterflies do flutter.

Comment by William R. Cumming

June 6, 2013 @ 11:24 am

Perhaps should have mentioned that I don’t have now and never have had any financial interest in the private standby generator business at any level.

Comment by Philip J. Palin

June 6, 2013 @ 5:23 pm

Bill:

I have met valiant “intrapreneurs” within the government, even in the most bureaucratic bogs. They are some of my favorite people. I can imagine you in that role. Would have been interesting to watch… and perhaps support.

In my experience your description of the private sector is not inaccurate of many firms most closely associated with the government, either through procurement or regulation. “Rent-seeking” is prolific. But even among many of these organizations there is an effort to use regulation as a way to encourage growth (at least in terms of increasing market share). For a dominant business a vigorous regulatory regime is one of the best ways to suppress market entry by potential competitors.

I will concur that it is outside the most regulated industries where the growth-bias is strongest.

Your insider description of government agencies is interesting to me… and fits the sort of behavior I have seen in the private sector within dying (non-growth) industries.

Phil

Comment by William R. Cumming

June 7, 2013 @ 6:38 am

One President who did both create bureacracies and terminate them was Richard Nixon. Example– his Phase i, II, and III Price, Wage and Rent control regimes.

Pingback by Homeland Security Watch » Public and Private Cultures: Context, concepts, communication, action (Part II)

June 13, 2013 @ 12:10 am

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June 20, 2013 @ 12:10 am

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June 27, 2013 @ 12:12 am

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