MANAGEMENT:IN THE midst of a global financial crisis, with daily increases in unemployment, the property crash, the banking crisis and poor credit ratings, to name but a few – it is now time for the public sector to recognise that the economic downturn is significant enough to warrant a new approach to business strategy while engendering entrepreneurship as a mechanism to advance through the current crisis, write CLAUDINE KEARNEYand PETER RYAN
The global financial crisis has prompted policy responses from governments worldwide and highlighted an urgent need for genuine entrepreneurial behaviour on the part of public service organisations.
While private sector entrepreneurship is well understood and recognised as imperative for organisational survival and growth, “public sector entrepreneurship” is an emerging concept.
Despite poor media and public perceptions, IT and related innovations have led to significant improvements in services and Irish public service organisations are generally more responsive and accountable than they were in the 1980s – albeit relative to a low performance base.
Notwithstanding successes for example in the areas of motor tax renewal and Revenue online, further progress is required before entrepreneurship can be said to be a key characteristic of the Irish public service.
The recent OECD and Task Force reports acknowledge progress in these areas and emphasise a need for continuous improvement in all aspects of public service delivery. A key question therefore arises as to whether the Irish public service is positioned to support future change and engender entrepreneurship.
Research undertaken by Dr Claudine Kearney, of the UCD Michael Smurfit Graduate Business School, the co-author of this article, suggests that public service organisations which display certain characteristics are more likely to adapt and respond both to the needs of citizens and challenges which face governments. These key characteristics include: flexible control systems, decentralised decision making and less formal organisational structures. The research also highlights a requirement to encourage venturing, renewal, innovation, risk taking and proactive behaviour.
It also suggests that where the external environment is supportive or seeks responses, greater opportunities exist for venturing, renewal and ultimately enhanced organisational performance.
It is therefore incumbent upon senior managers in both the public and private sector to monitor the external environment, modify their organisations’ goals/objectives and adapt to emerging requirements.
In developing a response to address economic or similar future challenges, a necessity for strong political leadership (on the part of government and relevant ministers), clear policy direction (from senior civil servants) and the effective communication and implementation of goals is obviously required.
Dr Kearney’s research indicates that such practices would not only allow public sector entrepreneurs to formulate superior strategies, but enable them to identify key business opportunities at a time that they are needed the most.
Public sector managers and leaders should therefore be required to provide vision and leadership while simultaneously developing an entrepreneurial culture within their organisations.
This means that entrepreneurial activities need financial, organisational and political support from senior managers. This will necessitate the elimination of obstacles, integration of departments, promotion of greater flexibility and decentralisation of decision making if entrepreneurship is to flourish.
RA Consulting works extensively with Irish public service organisations and argues for a review of structural factors, which may exist as impediments to the establishment of an entrepreneurial culture.
We suggest that while the policy of redeploying civil servants every three years offers certain benefits, it is problematic where personnel are assigned roles to which they are not suited. The recruitment and development of “generalists” has drawbacks, particularly where specialist skills are required to support diverse functional responsibilities in areas ranging from policy formulation to operations management or HR.
Specialist technical expertise is necessary to support rapidly changing enterprise sectors such as energy and communications. As officials with the relevant knowledge are redeployed into, for example, fisheries or administrative areas at the end of a three-year term, their own and their successors’ learning curves, interest and suitability all exist as factors which may challenge or undermine public service effectiveness.
While senior civil servants are not unaware of related challenges, their ability to redeploy personnel to best effect has been hampered by the decentralisation programme, a moratorium on recruitment and general pressure on personnel numbers. A greater focus on the need to protect and develop corporate memory should be recognised if a foundation for public sector entrepreneurship is to be firmly established.
Controls on State bodies and agencies can serve to restrict entrepreneurial activity. While these bodies and agencies should not operate outside their legislative mandates, greater latitude should exist in respect of budgeting, expenditure and operational prioritisation. Unfortunately, however, civil servants who are uncomfortable with their brief – perhaps as a result of learning curves or poor redeployment decisions – are likely to focus on inputs and controls rather than providing chief executives in State agencies with scope to innovate and meet the needs of citizens on a more proactive basis.
The Irish economy is significantly challenged by the current global financial crisis but there are clearly opportunities for the public sector to take action to overcome these difficulties. Important considerations arise in respect of the need to develop strategies and adopt interventions to engender greater levels of public sector entrepreneurship.
Dr Claudine Kearney lectures at the UCD Michael Smurfit Graduate Business School, and is undertaking an international comparative study in the area of public and private sector entrepreneurship.
Peter Ryan is a director of RA Consulting and programme director for the UCD executive education programme: Managing State Body and Agency Performance.
