The public sector entrepreneur - a new type of leadership

Published: 14 June 2014
When you put public sector and entrepreneur in the same sentence it is tempting to think of tenderpreneurs or corrupt officials who run businesses on the side. This article highlights the emerging idea that the public sector needs more entrepreneurial and innovation skills to continuously improve their service delivery and to actually make the business of government work.

Government's taking responsibility on the running of key services in many countries has created what is known in economics as quasi-markets. The basic idea of a quasi-market is that while government runs a specific service, it still needs to remain super-efficient, as if regulated by market forces.

Fundamentally, a quasi-market means that government purchases bulk services on behalf of citizens, while private providers compete for the same business. In order to be effective, both the public and the private sector must therefore effectively compete for the same 'business', while also providing a public backbone to serve mass needs.

The quasi-market model is often used in housing, electricity, health-care, and insurance. This standard is now increasing in areas such as security, education, retirement services, publications, and a host of other services that government gets involved in.

A quasi-market often creates a situation where government has a relative price advantage and the private provider has a relative quality advantage. In order to equalise between the have’s and the have not’s, this type of model is often employed in critical needs areas. The aim is to let the market become strong enough over time so that it can decrease the need for government to intervene.

Many predict that the future of the government in emerging markets will fundamentally change, to essentially provide these types of parallel economies. The purpose of such economies is to serve people and to protect their basic human rights and social security. At the same time, the markets are allowed to regulate normal supply and demand. This type of quasi-market economy, which is prevalent in most of the developing world, requires innovative policy, strong legislative oversight, effective regulators, and entrepreneurial skills to make it work. The quasi-market approach furthermore has the advantage that it protects against market failure, while having the benefits of competition and choice. In markets where this is not feasible, there will be classical state run organisations and increased regulation of the private sector.

The need for entrepreneurial and innovation management skills in the public sector has increased massively as a result of the devolution of control in government for a unit or departmental level. Entrepreneurial department heads are seen to take risks, back hunches, and create and seize opportunities. Yet they must also be motivators and leaders, creative resource investigators, communicators and ambassadors. Moreover, they must possess a clear vision, objectives and a strategic plan. All this happens within the context of strong control, checks and balances, and public accountability.

The entrepreneurial role is generally established in someone who demonstrates four parts:

    Characteristics needed to fulfil the role;
    Competence to evaluate activity in the external environment linked to a market awareness;
    Ability to develop and manage a flexible, innovative organisation; and
    Organisational skills to link the strategy and the execution thereof to the required socio-economic value for the participants.

The entrepreneurial manager must be able to scan the external environment to spot and take advantage of opportunities for the institution, while ensuring that the ideas selected for implementation provide a good 'fit' with the mission of the organisation itself. This type of socio-economic opportunism is required to identify and mobilise the required resources, which, in turn, will fulfil the needs of people. This is often labelled 'service delivery'.

 Public servants with a good understanding of the needs of business, and the ability to run public sector organisations on business principles, are rare. Increasingly, there is a need for leaders to learn high-level business skills that allow for effective delivery. Accordingly, it is necessary for these leaders to transplant their ideas into the framework of regulation and the complex world of politics and public administration.

However, a public sector organisation gets judged on the same service parameters as all other organisations. These days it is not uncommon to speak to an efficient government call centre and to get statements and updates via web-based interfaces and new technology.

So, what are the ideal characteristics of a successful future government employee who can lead others? Combining the results from several respondents and some surveys, the top characteristics seem to include:

    Self awareness
    Highly ethical conduct
    Master listening skills
    Ability to communicate
    Ability to execute on promises
    Ability to inspire his or her followers

Now compare the above survey-based list of characteristics with the typical characteristics of an entrepreneur:

    Tolerance of ambiguity
    Ability to convince others

While the two lists are not the same, they indeed contain a similar spirit, in that both refer to positive, committed individuals who inspire others to move forward. Both the entrepreneur and the public servant are motivated by a vision, and the reward follows from there.

Both also drive innovation: Innovation requires someone who understands parameters and non-negotiables, and someone who ensures that actions are put into the required frameworks for innovative delivery, without flouting regulations and practices.

Entrepreneurs can also learn from public servants, since the types of solutions made in the public sector are often focused on comprehensiveness and the ability to address the root of the problem. Moving beyond basic opportunism and looking at all aspects of a solution seems to be a luxury for the entrepreneur. Still, this is essential for an institution that will stand the test of time and be judged by the public.


While it is tempting to think of the public sector as an ineffective mechanism for social delivery, we must realise that globally many people are inspired to serve others as public servants.

As a common trend in governments worldwide, the quasi-market structure seems to dictate the need for specialist management and leadership skills in government that draws from effective business practices.

Public servant leaders need to have more in common with entrepreneurs. Likewise, they need to create new models and frameworks for delivery that is based on innovation, risk management and sustainable development.

Finally, entrepreneurs can also learn from governments in terms of who must be concerned with executing long-term solutions and with balancing costs with social impact. 
- Regenesys
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