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The Two Cultures Re-examined: A Perspective on Leadership and Policy Management in Business and Government

Phil Burgess, Public Policy & Communications GMD
01 May 2008

The Two Cultures Re-examined:

A Perspective on Leadership and Policy Management

in Business and Government

by

Philip M. Burgess [1]

Prepared as background for remarks [2] delivered at

2008 ANZSOG Public Lecture Series

Australia and New Zealand School of Government (ANZSOG)

Canberra, Australia

30 April 2008



 

Introduction

Thank you, Allan, and thank you John Wanna for your kind invitation to speak here tonight and thanks to you all for coming. I took advantage of the long ANZAC weekend to work on my remarks and a testimony to Parkinson's Law that the length of a paper expands to the time available to write it.

I assure you my remarks will only summarize my paper, so fear not.

Overview and approach

It is a great privilege to come to the Australian National University (ANU) and to participate in the Lecture Series of the Australia and New Zealand School of Government (ANZSOG).

I spent the first 15 years of my professional life as an academic. I like teaching and I like research&and, most of all, I like the academic life of give-and-take, so I always enjoy coming back to a university setting.

When John invited me to speak here today, he said, "pick an area of your experience or a topic of your choice." What a gift, I thought. So, I decided to take this opportunity to reflect on my experience as a student of governance working for many years in the academy and as a practitioner or clinician of the same working in US, East Asia, Europe and of course Australia as I have now been here for almost three years, and to make some observations about the key differences between the political cultures of the US and Australia as they relate to public policy making.

The two cultures of business and government

For a long time I have been fascinated by the decision-making environments of public administration and business administration. I believe the differences are much more important than the similarities.

As shown in more detail in Appendix A, these differences are many. For example:

1. Goal setting in the enterprise sector - to delight customers and reward shareholders - is relatively narrow compared to the comprehensive "public interest" objectives pursued by government.

2. Enterprise sector leaders almost always enjoy the support and encouragement of their policy board. By contrast, public sector leaders are nearly always opposed by a vocal segment of their policy board - the legislature - which tries to embarrass, trip up or otherwise undermine the authority and standing of the leader.

3. Enterprise leaders have enormous control over the decision process - the who, what, when, and how of decision-making. The CEO can decide who will participate on what issues at what time in what arena. Public sectors leaders do not have this kind of control. [3]

4. Enterprise leaders have substantial control over staffing and other "factors of production"; public sectors leaders are much more constrained in the hiring, sacking, and assignment of people.

As a result of these differences, there is a lot of room for misunderstanding between the wealth-creating institutions of society and the institutions of government. It is often difficult for the CEO and his enterprise leadership to understand and take account of the fact that the public sector leader typically needs:

  • a public interest rationale (i.e., "cover" or an inspired or "creative" explanation) for doing something that involves or benefits the enterprise sector - because everything is public, the mission of the public sector is the public interest, and the public is often skeptical (not without reason) of government-business relationships.[4]
  • time - because public leaders need to make sure key stakeholders are on board. This is a process that takes time, especially when some have a formal or informal "veto" power.
  • occasions for decision (or decision situations) that bring distributed benefits (what the game theorist calls "side-payments") for relevant stakeholders - because the building and maintenance of coalitions require benefits (what the game theorist calls "pay-offs") for everyone participating in the winning coalition.

These decision-making needs of the public manager - for a public interest rationale, time, and a distributed benefits to players beyond the buyer and the seller - are not a typical consideration to the "let's do it now" orientation of most enterprise leaders who value results and often devalue or don't understand process requirements of coalition building.

Therefore, we should not be surprised that the two sectors sometimes find themselves on a collision course - and occasionally even collide, usually with a loud crash, when it happens. And we should also not be surprised that the two cultures often find it hard to cooperate.

The two cultures of the enterprise sector and the government will never be totally comfortable with the other. Nor should they be. They have different missions and a different modus operandi. Instead they should make things work in the context of a healthy tension.

The public order and the civic order

But let's look more deeply at the public policy-making equation in a democracy - one that involves a relationship between:

  • the public order - which includes government and other public authorities (legislative, executive, judicial, and quasi-judicial regulatory agencies) at every level, and
  • the civic order - which includes the private or enterprise sector (e.g., business enterprises) as well as voluntary and non-profit organizations such as neighbourhoods, sports clubs, peak industry associations, think tanks, service clubs, churches, mosques, synagogues, centres for the performing arts, museums and other cultural resources indeed, all the things voluntary associations do.

A strong civic order is a key element of a healthy and resilient democracy. The enterprise sector is a key element of the civic sector - not the least because it is the primary wealth-producing segment of society. Hence the domination of one over the other - in either direction - is not good for democratic governance, and we should all work to keep the relationships in balance.

In my view that relationship is out of balance in Australia, where the public order dominates the civic order through agenda-setting, money, and expectations.


Footnotes:

[1] Phil Burgess is Group Managing Director, Public Policy & Communications, at Telstra Corp., where he is a member of the senior leadership team, and is responsible for public policy, regulatory affairs, government relations, media relations, corporate communications, executive and business unit services, and the Telstra Foundation. A former Fulbright Scholar and currently Visiting Professor at the RMIT Graduate School of Business, Dr. Burgess received his BA with honours from Knox College in Galesburg, Illinois and his Ph.D. with distinction from The American University in Washington, D.C. He can be reached by email at: phil.burgess@team.telstra.com

[2] These remarks are my personal views and are not necessarily the views of Telstra Corporation Ltd. or of the Public Policy & Communications group that I lead.

[3] The legislature, public interest groups and other stakeholders, media, awareness of FOI vulnerabilities - all constrain the ability of public sector executive to more than shape the process.

[4] That means the value of initiatives must satisfy national needs and multiple stakeholders&and that expanded or "spill-over" value is not always self-evident to stakeholders, opinion leaders or the public.

 


For a complete copy of this speech and academic references please download the PDF.

 

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