Leadership in the Public Sector

To define effective public management, we believe it is important to understand what makes public managers ineffective. In Chapter One, we discussed how the general perception of government incompetence has fed into the perpetual crisis in public management. This chapter will discuss the characteristics of public managers that underlie the image of incompetence and how that image can be countered.

The overall image of government incompetence feeds directly into (or is sometimes derived from) the perceptions of individual government employees—the “bumbling bureaucrats.” Why is the image of public sector employees in such disrepute? Are private sector people smarter? Are government employees lazy and corrupt? The answer, though simple, is not satisfactory. As discussed in Chapter One, public employees work within an institutional and legal framework that can inhibit efficiency and responsiveness. The result is that public bureaucracies are excessively formal and overly reliant on written communication. This extreme formality, sometimes called red tape, stems from both the need for public accountability and well-ingrained habit. Red tape in some routine bureaucratic processes can lead to ineffective and costly management practices. It can also lead to a very negative image in the mass and online media. Government aid often comes with lots of red tape. Even when federal funds have been allocated for a specific purpose, red tape can prevent the cash from getting to the people and places that need it.

In the aftermath of Hurricane Katrina, New Orleans residents struggled to get their lives back on track and were too often saddled with lengthy forms and paperwork when trying to apply for government funding. Among the many much-criticized elements of the Federal Emergency Management Agency’s (FEMA) response to the disaster of Hurricane Katrina were their Section 408 Housing and Rental Assistance programs. Evacuees attempting to access available aid, as well as nonprofit and private organizations that partnered with FEMA during the crisis, describe the process as disorganized and mismanaged. Deadlines and complicated application requirements were changed frequently, making it difficult for funds to be allocated. In some cases, applicants who were eligible to receive assistance under the Section 408 Housing Assistance program were incorrectly informed that they were ineligible. FEMA administrators who were interviewed by the Senate Subcommittee on Disaster Recovery of the Committee of Homeland Security and Government Affairs stated that some of the processes they had in place to disseminate information on policy changes were not successful in ensuring that FEMA’s fieldworkers knew the current policies (Ad Hoc Subcommittee on Disaster Recovery of the Committee on Homeland Security and Governmental Affairs, 2009). In such a massive disaster recovery effort, proper coordination and communication on the part of all levels of public managers is essential to ensuring that these efforts are successful. The media attacked FEMA for these delays and problems, and the federal government’s image suffered significantly in the eyes of an already skeptical public. In the aftermath of Hurricane Sandy in 2012, many of these issues had been resolved and funds were sent rapidly to individuals affected by the disaster. Though long-term repair funds were slow in coming and reports of these issues were widespread after Sandy, the short-term aid delivered by FEMA and first responders was impressive. These success stories were never reported—good news is less dramatic to report than bad news.

Government is not the only source of red tape. Large nonprofits can also be cumbersome. Another highly visible example of red tape inhibiting the distribution of aid resources was the Red Cross’s Means to Recovery program. The program was developed to provide up to $20,000 in funds to displaced New Orleans residents to start rebuilding their homes or to purchase a new vehicle. The Red Cross was heavily criticized for not adequately promoting the program to residents and for their lengthy twenty-page application form that, after being received, often took the agency months to review. The Red Cross attempted to expedite the process by cutting the application length in half. Following public protests, the Red Cross tried to defend itself against the negative publicity by indicating that the funds were very limited and that the organization had stepped outside of its normal function as an immediate disaster response organization into a role that was attempting to provide long-term assistance (Dewan and Strom, 2007).

Obviously, the societal importance of a public servant’s work means that she must operate under particularly high levels of scrutiny. If government procurement procedures are ignored, the media often assume that fraud has taken place. If incompetence, mismanagement, or bad luck is added to normal procurement procedures, massive delays are likely. Given the fishbowl atmosphere surrounding government development projects, it is easy to see why the image of the public manager is tainted with failure.

This fishbowl atmosphere allows for stereotypes of the inept bureaucrat to be perpetuated by the mass media and in the antigovernment rhetoric of several generations of hypocritical elected officials. Bureaucrat bashing has long been a popular sport for the media, the blogosphere, and aspiring politicos. Public policy decisions are often difficult and involve tough tradeoffs, and the considerations devoted to such choices are not always acknowledged by the media. It is much easier to make officials look bad than it is to illustrate the complexities of their position, and it makes for much better headlines. Elected officials therefore devote a great deal of time to avoiding responsibility for certain decisions and pretending that imperfect programs result from bureaucratic incompetence rather than deliberate choices.

Another factor that contributes to the image of the bumbling bureaucrat is the practice of avoiding choices—“passing the buck”—and hiding decisions behind vague, convoluted language. In making decisions, a manager may expose him- or herself to criticism from both internal authorities and the public. This fear of making decisions is a part of the culture of the public sector that the aggressive, outcome-oriented public manager must strive to overcome.

One of the biggest challenges that public managers face in trying to overcome the bumbling bureaucrat image is their lack of control over goal setting. In the private sector, a board of directors is often controlled by, or closely related to, an organization’s managers. But in the public sector, the board of directors consists of elected legislators and executives who are usually more concerned with their political health than with organizational performance. Anyone who has ever sat in on a congressional oversight hearing realizes that public managers do not control their elected board of directors. Fortunately for the public manager, the interests of elected leaders are sometimes served by allowing public agencies to perform effectively. Unfortunately for the public manager, political interests are difficult to predict and frequently change with little warning.

Because political interests determine the goals of public organizations, public managers often face shifting priorities. The most effective public managers are those who learn to adjust programs rapidly to reflect changed priorities. Effective public managers learn to foresee changes in policy direction and build agile organizations capable of rapid redirection.

Despite the overarching structural conditions that can undermine a public manager’s image, most public managers are adequate performers, and many are excellent. Yet all managers are subject to the same public image. It is not our objective to compare the performance of America’s public sector with that of its private sector. But given the strategic, ethical, and managerial errors of some private firms, we suspect that the private sector is not generally better at management than the public sector. During the financial meltdown in 2008, we saw failure in both the private and public sectors. Certainly there are public managers who can match, if not exceed, the performance of any private manager. Still, there are many inadequate public managers. Part of what creates a poorly performing public manager is the manager’s own attitude.

One reason for the negative perception of public management is the self-image of the public manager. Our government’s managers are not isolated from society at large; they are subject to the same symbols and media images that bombard the rest of society. That negative image can take hold and become a strong self-perception in the mind of the typical public manager. It sometimes creates a psychology of failure that can become self-fulfilling.

The way that several Northeastern cities have housed their homeless families is a good example of negative public sector thinking. Cities such as New York are perennially in violation of court orders requiring them to provide housing for homeless families, and the experience of the Gayles family is illustrative of how overwhelmed and negative-thinking bureaucrats often bring about this situation. Ms. Gayles and her three children were displaced or denied acceptance at New York City shelters on several occasions. According to the Department of Homeless Services, six out of every ten families that apply for shelter are told to go back to wherever they last lived. That’s an average of thirty-four families a day that are asked to leave a shelter after the city completes an investigation.

The Gayles family moved to New York City in 2011 and initially stayed with a family friend in Queens while Ms. Gayles searched for employment. This living situation quickly went sour, and the family was told they were no longer welcome to stay there. After moving out of the apartment in Queens, the Gayles family took up residence in a New York City homeless shelter. Soon Ms. Gayles was informed that she and her family were not eligible to stay at the shelter because they had a place to stay at their friend’s apartment in Queens. The family was told that they should return to their friend’s apartment in Queens, even though city officials had been made aware that the family was no longer welcome there. This eligibility requirement prevented the family from being offered a place to stay in a city shelter. The Gayles family spent a night at the YMCA and then started staying in Pennsylvania Station with their belongings in suitcases.

City officials characterized Ms. Gayles as uncooperative and claimed that she had rejected many of the housing options she had been offered and repeatedly missed meetings with her case worker. She denied the apartment housing options she had been offered because she thought that the apartments she was being offered were not in a safe location. This story is not unique in New York City, despite Mayor Bloomberg’s efforts and New York’s “Right to Shelter” law, which is one of the most generous programs in the nation. According to the Coalition for the Homeless’s State of the Homeless 2012 report, from 2010 to 2012, the number of homeless children grew by 17 percent, from 14,500 to 17,000, and the number of homeless individuals grew by 21 percent, from 35,500 to 43,000 (Markee, 2012; Burke and Russo, 2012; Legal Aid Society, 2012).

Despite the failure represented by these numbers, the Bloomberg administration has been successful in increasing the amount of affordable housing that is available to the working poor in New York. In the city’s defense, officials have argued that “taxpayers cannot afford to support everyone, especially those who are not willing to do their part” (Burke and Russo, 2012). Eventually the Gayles family made their way to shelter housing. Although city officials seem overwhelmed with demand, as the number of homeless individuals surpasses historical highs, many advocacy groups continue to sue and obtain housing for homeless families. The story of the Gayles family is a good example of the psychology of failure that grips overwhelmed public officials.

The self-defeated public manager is willing to define success as the absence of failure. Such managers lower their expectations, abandon any sense of vision, and ridicule those who retain ambitious goals. In many cases, self-defeated managers have good reasons for being negative. They may have been stabbed in the back by politicians, seen important pet projects overcome by inertia, or been subjected to any number of indignities.

In the private sector, such an unproductive manager might eventually be fired—or at least subjected to pressures to perform. In the public sector, it is not always possible to fire the manager, and it is often difficult to measure performance objectively. If success is difficult to measure, it may not be possible to hold a manager accountable for an apparent failure. In the business world, the balance sheet’s bottom line is a relatively unforgiving indicator of success. Private firms are measured on their ability to: (1) make a profit, (2) increase market share, and (3) provide acceptable returns on capital invested. In government, it is often difficult to determine whether an organization is succeeding. This ambiguity makes it difficult for a public manager to provide conclusive evidence of success.

A private manager can always take solace in a company’s profits and market share, claiming, “We may not make a perfect widget, but we still hold 22 percent of the market, and we make money.” The public sector analogue is to say, “Yes, the problem is not as bad today as it was ten years ago. The city only had 500 homicides this year, while ten years ago it had 550.” Despite this improvement, no one is going to hold a parade for the public managers responsible for this 10-percent improvement in performance. Public managers often have no easy response to attacks regarding levels of government productivity; all too often, they accept the negative image that is presented to them. Such acceptance is the first ingredient of the recipe for failure.

Attitude is a critical factor influencing success. When managers accept a negative self-image, they are likely to fold at the first sign of an obstacle. Instead of figuring out how to get around a constraint, they cite the obstacle as an explanation for nonperformance. Every one of the problems that public managers face can be overcome. Solutions are sometimes complicated and are often circuitous, but they always exist. In Chapter Six of this book, we discuss how constraints can be eliminated by analyzing and improving work processes through a variety of management innovation tools (Cohen and Eimicke, 1998). It is possible for public managers to deal imaginatively, legally, and ethically with the constraints placed on them. However, given the prevailing negative view of government in this country, it can be difficult to create a quality government with a positive workforce. It is easy to lack confidence in your own abilities to work around challenges when the people you were hired to serve lack confidence in you.

This attitude plays out in many ways. In one Midwestern city, the city manager canceled a popular street fair because liability insurance was unavailable. Rather than work with the legislature to secure public insurance or with the insurance industry to encourage private coverage, this city manager simply gave up. In contrast, when William Eimicke was dealing with exactly the same insurance issue in New York City when he was housing commissioner for New York State, he convinced Governor Mario Cuomo and the state legislature to self-insure the Roosevelt Island tramway, thus keeping that highly visible and very popular transportation link with Manhattan operative in the face of astronomical increases in the cost of private insurance.

In the U.S. Department of Energy, a mid-level manager was told that he had authorization to hire fifteen people if he could get them on board in thirty days. When he discovered that it would take that long simply to get a position description approved and a job advertisement posted, he decided to make do with his existing staff. Rather than attempt to circumvent or eliminate an obstacle, this manager just gave up.

The passivity of some public managers in the face of obstacles is partly a function of their own inability and partly a function of the American political culture. Government’s role in our social and economic life has always been greater than American mythology would admit, and the scope of government activity has dramatically expanded in the past fifty years. Yet even when the public sector is asked to resolve society’s most vexing problems, Americans retain a love-hate relationship with government. They want government to do things for them but not to them. Our society understands that although big government can be a positive force for the nation, a large, powerful government can also be a threat to individual freedom. In order for the government to have an impact on society, whether good or bad, the managers who are leading the public sector must be effective. As President Obama pointed out in his first inaugural address in 2009, “the question we ask today is not whether our government is too big or too small, but whether it works” (Macon, 2009). Even when government is successful in giving us the things we want, we really do not want to hear about it.

In our political culture, we are still not comfortable with the notion of an activist government. That is why politicians have been able to wage reelection campaigns by running against the governments they continue to lead. Over the duration of President Obama’s first term in office, the size and reach of government expanded—from bailing out the banks and the American auto industry to the expansion of national health care. In 2012, Republicans campaigned against the changes in the scope and size of government that they believed had occurred during Obama’s first term. The Tea Party movement was the heart of a determined campaign focused on reducing the size of government. Although President Obama was reelected in 2012, antigovernment rhetoric continued.

In July of 2012, the Supreme Court ruled that President Obama’s health care overhaul was constitutional. This decision further fueled the debate between Republicans and Democrats regarding the size of government, which was a central political theme in both the 2010 mid-term elections and the 2012 presidential campaign. In the days leading up to the Supreme Court’s ruling, Republican Representative Michelle Bachmann noted that the decision “will determine whether or not the court believes the government has a right to mandate that Americans buy a product or service, a direct impact on our freedom” (Steinhauer, 2012). In Governor Romney’s presidential campaign, he promised to repeal Obama’s health care law and argued that such an increase in the breadth of an activist government’s power restricts health insurance options for Americans.

In such an environment, efficiency and productivity are not the dominant concerns of the elected leaders to whom public managers report. Symbolic victories are often more important than actual results. As a society, we continue to place a wide array of steps between the formulation of a public policy and the implementation of a public program. Some steps provide essential checks and balances in the political system, but, unfortunately, these lengthy processes reduce not only fraud and political influence but also organizational efficiency.

There is substantial political pressure to slow down a program’s implementation. Unless a program has high priority, it is subject to the leveling impact of routine decision making. Under routine conditions, obstacles such as time-consuming contracting procedures are frequently followed to the letter. Overt opposition to these slow procedures can often cost managers more than they gain. A contract or personnel office called on the carpet for inadequate performance has a thousand ways of subverting the organization that blew the whistle on them: Requests for proposals needed to hire contractors are sent back to the program office for revision twenty times instead of the usual eight. Job descriptions keep getting “misplaced,” and phone calls are returned only when absolutely necessary. E-mails are lost because “the system crashed.” You get the idea. When public managers realize the difficulty of taking on the system, they start to accept constraints as a given rather than as a variable. When they allow the system’s constraints to retard their own performance, these public managers have discovered the second ingredient of the recipe for failure.

The most effective public managers are careful people, whereas the least effective public managers are timid people. Careful managers understand that poorly thought-through actions can result in unanticipated consequences. However, it is very easy for caution to become paralysis. New projects are frequently abandoned when managers are confronted with tentative negative signals. At the federal level, we have seen projects aborted because overly cautious bureaucrats heard rumors that the Office of Management and Budget did not favor their proposal.

An instructive case involves the U.S. Postal Service’s response to the changing business practices available through the Internet starting in the late 1990s. The rapid expansion of the Internet caused a decline in the Postal Service’s core business: first-class mail. First-class business mail, which consists of the bills and statements sent out by most businesses, has decreased dramatically in recent years, and almost the entire decrease has been the result of the Internet. The USPS, however, was slow to adopt internet-based services in its business model, despite the fact that multiple competitors in the private sector had begun to market electronic payment services that generate fees from this shift. Although the Postal Service finally put in place a team to look at e-commerce activities in 1999, its bill payment products were slow in coming to market. The USPS was too cautious in choosing the right path to address the threat to its core business. While the Postal Service was deciding, the private sector was moving, depriving the USPS of a large potential market (Cushman, 2000). In the second decade of the twenty-first century, the post office is nearly under siege. Electronic mail is reducing first-class mail, and although e-commerce is increasing the use of package delivery service, the post office is finding it difficult to compete with FedEx and UPS.

Another concrete example of post office failure is online stamp and parcel-postage purchasing. This potentially very beneficial and profitable innovation spawned two private sector start-ups in 1999 with substantial venture capital funding, as well as tremendous investor interest. The companies failed, blaming “an overly cautious Postal Service for making [success] virtually impossible.” The Postal Service set a $500 monthly spending limit per customer, effectively shrinking the potential market. And it issued a seventy-nine-page rule book of technical requirements, which, for example, stipulated that stamps—printed onto the envelope from the computer—should be placed exactly one-quarter inch from the top and side. Despite the fact that these products would funnel revenue into the core businesses of the Postal Service, and all it had to do was develop the flexibility to use this channel, inertia ruled the day (Weintraub, 2000). Although the Postal Service has since developed a more user-friendly website for purchasing stamps, printing mailing labels, and scheduling pickups, its inertia early on allowed competitors to dominate much of the e-commerce and business mailing markets.

Overhead and headquarters organizations frequently emphasize process over product. Local units of government and line organizations with direct client contact do not have the luxury of emphasizing analysis over action. Instead, line organizations tend to get bogged down in standard operating procedures. Caution does not degenerate into inactivity; rather, it leads to the repetition of known activities. In the case of the post office and the Internet, by waiting for the perfect opportunity to emerge, the organization allowed caution to become inertia—the third ingredient in our recipe for failure.

An obviously disturbed man checked into a public hospital in a Northeastern city recently, saying that he had heard God’s voice, and the Lord had instructed him to kill someone. After a day or so, the man calmed down, was released from the hospital, went out on the street, and killed several people. At a press conference, the city official in charge of hospitals announced that after careful study she had determined that the man had been “released prematurely.” When the press asked if that meant that the man should not have been back on the streets, the city official said no; her only conclusion was that the man was “released prematurely.” Naturally, the media made this public manager appear foolish for not agreeing to a logical conclusion based on her own statement.

Bureaucratic language is famous for being incomprehensible. Public managers have learned to hide their actions behind jumbled phrases, acronyms, evasions, and the passive voice. These techniques are used to prevent outsiders from understanding who is doing what to whom. Consider “preventative-retaliatory strikes” (invasions) and “revenue enhancements” (tax increases).

If confusing language were the only method used to create ambiguity, it might not be a serious issue. Unfortunately, some managers attempt to hide poor or nonexistent performance behind vague statements of goals, imprecise assignments of responsibility, or inexact performance indicators. Some managers learn to “game” the system and present the illusion of competence. They may create the impression that they are accomplishing important goals while achieving very little. Scheming managers of this type may do quite well personally. They may receive frequent, if undeserved, promotions. In some instances, a manager’s image carries more weight than his or her performance. When image is rewarded in lieu of performance, the impact on an organization can be devastating. In the long run, then, these poor performers often outsmart themselves.

The final ingredient in the recipe for failure is forgetting that organizations are made up of people and that people count. Management can be defined as the art of getting people to do things. Effective management is getting people to do the right things. Let us assume that for most people, the ideal state of existence is sipping margaritas on the beach while watching the waves roll in. The effective manager must convince people to leave that ideal state and do things they would not otherwise do. The manager must obtain resources to create incentives. Incentives are used to stimulate people to achieve organizational goals.

Organizations should be seen as organic entities—living, breathing beings. Organizations are not machines to be fueled and lubricated; they are organisms to be fed and nurtured. In order for an organism to survive, it needs nourishment from its environment. Resources are made available to it because the organism is capable of performing some function that the environment requires.

In the crush of daily events, managers often forget these essential precepts. They forget that they need to interact and communicate with the people who work for them. Hiding behind their desks, they make decisions that frequently have an undesired and unanticipated effect on their organizations. Rather than deal with staff members as living components of a living organism, managers deal with them as abstractions. If this continues long enough, productivity is impaired and the organization ultimately loses its ability to attract resources.

One such decision that managers make—and attempt to implement without employee input—is to reorganize their units. As we discuss later, in Chapter Five, reorganization can disrupt the dynamics of the office and can breed low morale and distrust of management’s motives. Major management decisions are more likely to be effective with the input and participation of those affected. Or as Mary Parker Follett (1940) argued, employees will be more effective when they are encouraged to “work with” rather than “work under” managers. Communication tools are available that can make it relatively easy to obtain input from a vast number of employees. Managers who facilitate decentralized decision making by sharing power, information, and resources with their employees will find an overall improvement in organizational performance. These employee empowerment techniques inspire people to rethink and improve organizational functions while also serving as a source of motivation (Fernandez and Moldogaziev, 2011; Nayar, 2010).

A good example of empowering people is provided by HELP USA, a nonprofit that provides homeless services and operates affordable housing in New York City as well as other locations in the United States. In New York City, the nonprofit HELP USA operates under contract with the city’s Department of Homeless Services (DHS) and provides transitional housing and supportive services to over nine thousand families. In 2005, Mayor Bloomberg implemented a strategy of performance-based incentives for shelters in order to improve services for the city’s homeless population, with an emphasis on decreasing the time that clients spend in the shelter.

The goal of this strategy is to move a family into permanent housing and reduce the time of upheaval caused by homelessness. To achieve this goal, caseworkers, executive officers, and supervisors at one of HELP USA’s shelters were all engaged in the process of defining the goals of the site, which included a target of 178 placements for the year 2006. Instead of each employee’s being responsible for a specific set of cases, HELP employees started to work as a team to transition families into long-term permanent housing and maintain a high shelter turnover rate.

By the end of 2006, this specific HELP USA site had placed 272 families. The average time that a family resided in a shelter before moving into permanent housing was reduced by five and a half months. As a result of the performance measurement program and employee empowerment, one of the worst-performing shelters in the city had been transformed into one of the best (HELP USA, 2008). Implementing a performance measurement process increased HELP’s organizational effectiveness.

As a number of people have advocated, injecting competition into the delivery of public services can increase productivity. However, competition is not a cure-all, and at times government’s work is so specialized that competition is not feasible (Kettl, 1993). Moreover, if the workforce is not supportive of change, competition may not succeed. It is critical that worker needs and concerns be considered as the move to competition begins. A recent public-private competition for business with the Army Corps of Engineers provides a good case of a carefully crafted move to competition.

A request for proposal for about 1,100 information management and technology jobs was sent out by the Army Corps of Engineers. The winning bid, which happened to be in-house, proposed that the IT work be completed through a partnership between federal employees and the private contractor Lockheed Martin. This public-private partnership was projected to save the Army Corps of Engineers an estimated $1 billion over six years. This particular bid included an innovative and unconventional hiring process by which employees would be hired to work for the federal agency on “competitive reassignment” as well as through a priority placement system (J. Miller, 2006).

Choosing to use such a strategy eliminates a lot of the inefficiencies of federal hiring because federal employees reapply for their jobs and are hired to a position based on how well their skills map to the particular job function that is being filled. This strategy is different from hiring, which is sometimes conducted on the basis of seniority. This instance of government competition is controversial in the eyes of many skeptics who are wary of such an unconventional hiring process. Critics argue that in reality the project is more representative of a private sector contract won by Lockheed Martin than a public private partnership because employees have to reap-ply for their jobs (J. Miller, 2006; Mandel, 2006).

Because most managers are not trained to manage, examples of inadequate management of personnel are easy to find. The most typical manifestation of inadequate management is simple rudeness—dealing with subordinates as though they really were not valuable human beings. Many managers have one personality for their staff and another personality for their boss. Others encourage staff members to take strong public positions on an issue and then refuse to provide support when a staff member is attacked. Sometimes a manager will make no effort to understand a staff person’s motivations and will reward a success with an entirely inappropriate incentive. Forgetting that people count is the worst mistake a manager can make. Managers who are not skilled in communicating and interacting with people tend not to succeed. Furthermore, managers tend to fail when they are forced to give orders. Organizations do not act because somebody pushes a button; they act because people decide to take action.

To illustrate this point, we examine the case of a small Southern city’s budget office. The city manager of this particular municipality hired a recently graduated M.B.A. to examine the operation of the budget bureau. As might be expected, this young man suggested extensive computerization and designed an elegant cash management and financial control system. As impressive as this system looked on paper, it proved to be a disaster in practice. Insufficient attention was paid to the preferences and talents of the people involved in running the system. A system that the staff understood and found comfortable was being abandoned. Staff members were not consulted about the development of the new system. They were ordered into a poorly designed, superficial online training course, handed a PDF of a procedures manual, and given thirty days to prepare for the conversion. Predictably, the city manager faced a small-scale revolt. The new system was shelved and the much-needed modernization was indefinitely delayed. This city manager learned the hard way that people are the heart of an organization and that people matter.

We believe that the public sector can be effectively managed. The key to effective management is an active, aggressive, and innovative effort to overcome constraints and obstacles. Effective public management is, in large measure, simply the product of a positive, can-do attitude. It is easy to be frustrated by the roadblocks placed in the path of public organizations. It is easy to give up, take a passive approach, and wait to be told what to do. Effective public managers try to make things happen; they pursue programmatic goals and objectives by thinking and acting strategically. Effective managers attempt to understand why things are happening and how things can be changed. Effective managers are in constant touch with an informal network of informants who provide feedback on ideas and initiatives, and they are constantly learning, teaching, experimenting, and changing.

The best managers are those who understand their organization’s environment. They are able to project the effect that their actions will have on that environment. They also have a keen understanding of how these outside forces constrain and influence their organization’s activities. Effective managers are constantly identifying program areas to move into, resources that might become available, and potential sources of political and stakeholder support. They have, at least implicitly, a set of long-term objectives, and they continuously search for new ways to reach those objectives. Flexibility, resilience, and persistence are key attributes of the effective public manager. When obstacles cannot be overcome, new paths are pursued.

Embedded in the definition of effectiveness is the key concept of entrepreneurship. To pursue an agenda aggressively, a manager must design a course of action that can avert bureaucratic obstacles. Therefore, effective public management must be entrepreneurial public management. Given the array of constraints under which public managers operate, it is impossible for managers to be effective if they are unwilling to take risks. An effective entrepreneurial public manager organizes and manages a public undertaking, assuming risk for the sake of organizational gain.

Unlike the private entrepreneur, the public entrepreneur is not seeking personal or corporate financial profit; instead, he or she takes risks to ensure that government programs succeed and that the public reaps the benefits of that success. Unlike the stakes of the private entrepreneur, the public entrepreneur’s are not private capital but, rather, public funds and his or her own professional reputation and advancement. Entrepreneurial public managers are characterized by their willingness to take on big policy and management problems and to rethink programs from the bottom up. This idea is so significant that we want to reiterate it: it is impossible to be an effective public manager if you do not take risks.

American public administration is at a critical juncture. The activist federal government that began under Franklin D. Roosevelt is over eighty years old and under fundamental attack. John F. Kennedy’s New Frontier is now more than five decades old. Today, a great deal of the creative force in American government is at the state and local levels (Osborne and Gaebler, 1992; Brown and Potoski, 2003; Moynihan, 2006).

For example, New York City has developed a long-term sustainability plan that is more rigorous and far-reaching than any sustainability program of the U.S. national government. New York City’s PlaNYC 2030 addresses a range of urban issues that emerge as a result of our reliance on scarce natural resources. The plan was developed to accommodate a projected population growth of one million people by 2030 in this urban metropolis—while maintaining the high quality of life most New Yorkers enjoy. The plan includes goals for reducing greenhouse gas emissions by 30 percent by improving transportation and increasing building energy efficiency. In implementing the plan, the city passed landmark energy efficiency legislation for its buildings, which included creating a new citywide energy code; a benchmarking requirement; a lighting system upgrade requirement; tenant submetering; and required energy audits and retro-commissioning.

Another initiative of the plan aims to improve water quality and tackle the city’s combined sewage overflow pollution problems by employing “green infrastructure” techniques, such as swales, porous pavement, green and blue roofs, and other storm water controls. These techniques are as effective as traditional “gray” techniques (treatment plants and holding tanks), but are less expensive and far quicker to install. They have numerous cobenefits, like cleaner air, reduced urban heat island effect, improved energy efficiency, and enhanced quality of life through increased access to green space.

By 2011, only four years after the plan was released in 2007, greenhouse gas emissions were reduced to 13 percent below 2005 levels (The City of New York, 2011; “PlaNYC: 2030,” 2007). This is proof of NYC Mayor Bloomberg’s success in implementing the strategies outlined in the plan and offers wider evidence of the ability of such a long-term urban sustainability plan to deliver real results. In fact, local governments have direct authority, independent of the federal government, over many of the systems and processes—public transportation, the built environment, and service delivery—that can help address complex global issues like climate change. New York City and many other cities across the country—and the globe—are not waiting for national or international action on issues like climate change. New York City is taking proactive steps to address what it sees as a critical policy issue. PlaNYC 2030 is essentially a return to the roots of American government. Before the New Deal of the 1930s, most policy initiatives were proposed and implemented by state and local governments.

Although government growth at the federal level has been relatively slow for the past several decades, state and local governments have grown considerably and have increased in scope and sophistication. In 1960, there were eight million civilian government employees in the United States. Of those, 2,421,000 were federal workers and approximately 6,387,000 were employed by state and local governments (U.S. Bureau of the Census, 1990). By 1990, federal employment had risen modestly to 3,105,000. During this same period of time, the number of state and local government employees more than doubled—to 15,263,000 (U.S. Bureau of the Census, 2000). By 2010, the number of full-time federal employees had dropped to 2,583,768, with state and local government employment continuing to grow to 16,581,617 employees (U.S. Bureau of the Census, 2010a, 2010b). Whereas in 1960, 72.5 percent of all government officials were employed by state and local governments, by 1990, the state and local share of total government employment had grown to 83 percent. In 2010, this number had grown to 87 percent (U.S. Bureau of the Census, 2010a, 2010b). Counties have emerged as a significant new unit of government, filling a critical void between states and municipalities.

All levels of government now rely on private contractors to provide many services. Privatization, competition, and contracting have created an entire industry of quasi-governmental employees. Although the exact number of contract employees is difficult to estimate and varies from year to year, we do know that between 2000 and 2005 the rate of spending on federal contracts was double that of other federal discretionary spending (U.S. House of Representatives Committee on Government Reform, 2006). By 2010, the federal government was spending $320 billion annually for contracts and services, according to a study conducted by the nonprofit group Project on Government Oversight (Nixon, 2011). This number represents not only a significant amount of the federal budget but also a larger sum than the federal government would have paid if federal employees were hired to perform the same jobs (Nixon, 2011). Not surprisingly, labor unions have found that the public sector is one of the few growth areas for their organizing efforts. However, whereas unions at the state and local levels have enjoyed some modest success, at the federal level they are relatively weak. Federal labor organizing was dealt a significant blow when Ronald Reagan fired striking air traffic controllers in 1982.

The most recent attacks on unions have come at the state level and have focused on pension benefits. The most visible attack was the state of Wisconsin’s bill limiting the right of state workers to engage in collective bargaining. The Republican governor, Paul Walker, proposed the bill and argued that the law would encourage the creation of jobs in the private sector. This proposal is part of a larger, national debate on the topic of collective bargaining and union workers’ rights. On the other side of the debate, Democrats fought to block a vote on the bill because they felt that the bill was an attack on working families and violated the rights of workers to collaborate and negotiate for their rights.

To postpone a vote on the bill, the Democrats fled to Illinois leading to lengthy negotiations and heated news conferences. When the Republican senate passed the bill by excluding Democrats from the vote, it resulted in a recall campaign led by labor leaders and the Democratic Party against Governor Walker. The recall process began in November of 2011, and after a six-month battle—in which both sides raised significant funds, public support, and national media attention—Governor Walker remained in office by defeating his opponent, the Democratic mayor of Milwaukee, Tom Barrett (Davey, 2011; Fahrentold and Weiner, 2012).

Although these trends of government contracting growth and decreased union power seem unrelated, they provide evidence of the fluidity of contemporary public administration. Government does more than it used to, albeit not at the federal level and not always with public employees. Unions are a factor in some state and local governments and not in others. And government employees are increasingly better educated and better trained. For the effective public manager, opportunity lurks within this fluidity.

Government activities are no longer limited to simply raising and spending money. Many programs are funded through new and imaginative mechanisms and are executed by combinations of public, quasi-public, nonprofit, and private organizations. Although the use of partnerships and combinations of public and private entities for service provision is by no means a new phenomenon, awareness of and interest in such efforts have blossomed since the late 1990s (Oakerson, 1999; Agranoff and McGuire, 2003; McGuire, 2006).

A wonderful example of an innovative public-nonprofit partnership is the conservation, redevelopment, and redesign of New York City’s abandoned elevated High Line freight railroad track into a public park. The completion of this park project was made possible via a collaborative effort between the nonprofit group Friends of the High Line, the Department of City Planning, Mayor Bloomberg, and local real estate interests. In 1999, the community-based nonprofit Friends of the High Line was formed and worked with its partners to save the High Line from demolition.

The mayor and the City of New York played an indispensable role in getting the project off of the ground by first designating the space solely as a public recreation area and designing the Special West Chelsea District. The Bloomberg Administration played an innovative leadership role by allowing property owners to transfer their development rights to parties who were interested in developing the High Line Park. This move led to widespread community support, which was essential to moving the redesign project forward.

By 2012, two of the three construction phases had been completed. When phase three of the project is finished, the High Line will consist of a mile and a half of open public space (Brooks, 2010; Friends of the High Line, 2012). It is widely considered one of the most innovative and sophisticated parks in America—and it is certainly one of New York’s most popular, as evidenced by the crowds of locals and tourists alike who flock to its green oases every day.

Innovations like the High Line Park make great media stories and lead to the sharing of ideas and best practices. This in turn spawns further creativity and a more supportive institutional environment in which public managers can find willing partners and succeed.

Partnerships and networks can be used for a wide range of services and programs, from the procurement of resources, joint planning or financing of programs, and data sharing, to direct implementation of projects (Agranoff and McGuire, 2003). Although the use of partnerships or collaborative efforts does not guarantee program success, it does offer a venue for creativity and alternative approaches for public managers to work around some of their constraints. The types of organizational arrangements and opportunities are vast. A few examples of the public-private partnerships that embody innovative problem solving are as follows:

· The U.S. Army has begun privatizing its base hotel rooms, starting with the Fort Hood hotel. Under this strategy, private developers, such as the Australian-owned Lend Lease, gain ownership of hotels that are on Army-owned land, and private hotel companies act as operators. The private developers receive fees, and the remaining profit is retained by the hotel operators. This partnership allows the Army to upgrade the hotel space it offers for our soldiers while saving money and offloading an area of their operations that is not at the core of their expertise (Shevory, 2012).

· The federal government has hired Amazon to develop cloud computing, which is part of a new priority initiative across all agencies to shut down their data centers. Amazon has developed “GovCloud” to prevent security breaches by granting access to only government agencies and contractors. By 2012, the number of agencies that Amazon has a contract with had grown from 20 to almost 150 (Censer, 2012).

· In Texas, JCPenney and local officials developed a public-private partnership that creatively combined resources and addressed a pressing public policy problem. Recognizing that affordable child care was a constraint on keeping good workers, JCPenney met with officials and established a program to provide a mix of day care, after-school programs, and classes for the children of JCPenney employees. The program was staffed by city teachers and social workers. Following its initial success, two other companies (Ford and IBM) designed similar programs of their own (Greenhouse, 2001).

· The Cities of Service coalition, which was founded in 2009 by seventeen mayors from across the United States, works to promote “impact” volunteering by connecting volunteers with partners in the communities who are in the greatest need. Impact volunteering consists of “strategies that target community needs, use best practices, and set clear outcomes and measures to gauge progress.” By 2012, Cities of Service had established a $2 million volunteering fund and attracted one hundred mayors representing nearly fifty million Americans (Cities of Service, 2012).

· Along with a number of other states and localities that have collaborated with private companies to implement transportation and road construction projects, Oregon’s Department of Transportation created an Office of Innovative Partnerships and Alternative Funding as a way to facilitate private contracts for the agency. Through the office, the state has even explored ways to develop, through private partnerships, installations of solar energy panels along state highways, which the department would have limited funding to develop on its own (Milstein, 2007).

Examples of creative partnerships can be found throughout the United States. These initiatives are evidence of the entrepreneurial spirit in state and local governments.

The expanded interest in collaborative and innovative public sector programs is to some degree indicative of the increasingly complex and interrelated world in which we live and govern. Complex modern problems cross jurisdictional boundaries, and society’s need for an activist government that can respond and adapt to those problems is increasing. The principal cause of this complexity is economic. In the last several centuries, U.S. society has transitioned from the simplicity of an agrarian lifestyle to a modern global industrial life, with its attendant material, cultural, and intellectual rewards. Each of us grows ever more dependent on others to meet our basic needs. Our labor gets further and further removed from the direct production of food, clothing, and shelter. Each year, more of us manage information, provide services, or work in professions; fewer of us actually produce material goods.

For this giant interconnected economic machinery to survive, it must be constantly mediated, adjusted, and lubricated. If the economy falters, government must intervene. If a disease races through the population, government must deliver a cure. If terrorists use airplanes as weapons, not only must the security issues of terrorism be confronted, but the economic impact of reduced air travel, due to fear of flying, must also be addressed by government. If harmful chemicals are entering our water supply, government must clean it up or ensure that others do so. If the homeless are sleeping on street corners, government must provide shelter. Government is involved in everything, from filling potholes to encouraging the reproduction of captive pandas.

A strong current in American political thought seeks to reduce the role of government because it fears that government is a threat to liberty. Although such fear runs deep and has been reinforced by the historic emergence of fascist and communist regimes, antigovernment rhetoric is an anachronism. Economic interdependence is a far greater constraint on individual freedom. The political debate over more government versus less government is at best a symbolic discussion.

The American presidencies of the last four decades illustrate the point. Despite the proclaimed intentions of conservative executives such as Ronald Reagan and George W. Bush, total government spending as a percentage of gross national product has risen by nearly 10 percent. Total government spending as a percentage of gross domestic product was 31 percent in 1970, 34 percent in 1980, 36 percent in 1990, 32 percent in 2000, and 41 percent in 2010 (Chantrill, 2012). Although 41 percent is unusually high due to economic stimulus and bailout efforts, government spending as a percentage of GDP did not shrink as a result of the conservative “revolution”. Although the tenor of the federal government’s programs changed during this period, the scope of governmental activity was not reduced during those years. The major trend during the 1980s was a steady increase in the cost of government transfer payments and a shift from domestic programs to defense programs. With the emergence of the “compassionate conservatism” of President George W. Bush in 2001, we again did not see reductions in the overall size of government. With President Bush’s war against terrorism, we witnessed a rapid increase in the size of the federal budget in response to security and economic challenges confronting the United States.

Although American political campaigns often make an issue of the size of government, in the current global economy, growth in government is generally not an ideological choice; rather, it is merely a reflection of economic reality. Increased material consumption adds transactions, volume, interdependency, vulnerability, and complexity to our social and economic relationships. Unless we radically change our social and economic order, government’s role will continue to expand.

If traditional values such as liberty, family, spirituality, and environmental preservation were to replace our society’s main goal of economic growth, a simpler social and economic order could be created. If our social and economic relationships could be simplified, then the role of government could be reduced. However, in the United States, the preservation of our traditional values is dependent on our continued economic growth. Political stability is needed to maintain traditional values, and declining economic growth leads to political instability. Americans will sacrifice tradition to maintain a consumer society but do not wish to be forced to choose. The seductive power of material consumption is becoming a fact of life worldwide. To attempt to preserve traditional values while pursuing economic growth will increase a society’s complexity and the need for social and economic governance.

Modern American society demands it all: plastic bags and a toxic-free environment, fresh fruit and safe pesticides, material wealth and spiritual fulfillment. A free market alone will not produce the type of society in which Americans wish to live, nor can government alone do the job. The free market is not designed to protect traditional values, and government is not very good at producing satisfactory levels of material wealth. A mixed public-private system is required. This obvious truth was implicitly accepted in the United States for most of the twentieth century, and nothing in the twenty-first century—so far—seems to challenge the need for public-private partnership. If anything, the need to make that partnership more sophisticated and better managed has become a central issue in public administration.

Although the political dialogue does a good job of masking it, there is a broad consensus behind activist government in the United States. Put another way, whenever our society faces a significant problem, we look to government for its solution. Government is considered a legitimate participant in virtually every field of endeavor. We may not want government to dominate a particular enterprise, but we frequently want it involved. We do not expect the government to manage our money, but when the largest American banks were on the precipice of failing in 2008, we expected government to step in. This is not to minimize the importance of the private marketplace. Capitalism has transformed life itself in the developed world. We are simply arguing that the ideological fervor for private enterprise obscures the critical role that government plays in regulating, lubricating, and mediating the private economy. (Imagine a professional football game without referees.)

The demands placed on government are likely to expand at a faster rate than government’s resources. As the gap between public demands and government capability widens, the need for imaginative public entrepreneurs increases. Beginning in the late 1970s and continuing today, the public has expressed strong opposition to tax increases and has generated political pressure to reduce taxes. Today, public officials often find it necessary to identify revenue sources when proposing new programs. Dedicated trust funds, user fees, leasebacks, and other imaginative revenue devices are being adopted with greater frequency. Today, there is an increased demand for public managers who are sophisticated about public finance and capable of “doing more with less.”

In June of 2011, the Tea Party created the Tea Party Debt Commission, which serves as a platform for the public to voice their opinions about cutting the federal budget. The Commission has a goal of cutting spending by over $9 trillion over ten years, seeking to reduce the budget for big government programs by repealing President Obama’s health care legislation, privatizing Fannie Mae and Freddie Mac, eliminating the Department of Education, and cutting the budget for environmental programs (Tea Party Debt Commission, 2012; Bedard, 2011; L. Kaufman, 2011). A 2011 Gallup poll found that 73 percent of Americans felt that the government was spending too much on programs, and 85 percent explicitly feel that spending cuts should play a role in combating the federal budget (Newport, 2011). At the same time, six in ten Americans are opposed to cuts in spending for education and are supportive of increasing spending on development of renewable energy and alternative fuel sources (Newport and Saad, 2011; Newport, 2012).

Unfortunately, negative rhetoric has driven resources and talented people away from public service. Public officials have little prestige and are seriously underpaid. Jobs within the federal government are now more technical in nature and therefore require higher levels of educational attainment—a trend that translates into heavier recruiting from the fields of science and engineering. However, the private for-profit and nonprofit sectors’ employment opportunities are often more attractive to graduates of advanced science and engineering programs. For example, in 2008, approximately 70 percent of individuals trained or working in science and engineering worked in the business/industry sector, 12 percent in the government sector, and 18 percent in the education sector (National Science Foundation, 2012). Although many of the challenges facing governments have become more complex and technical—mitigating the effects of climate change, protecting citizens from terrorists, controlling global infectious diseases, and sustaining biodiversity—governments are not attracting the best and brightest to manage these issues.

In an effort to encourage education in the fields of science, technology, engineering, and math (STEM), President Obama has undertaken a number of initiatives to better prepare American students to enter these fields. Among these programs is the White House Science Fair, which was started in 2010 and celebrates the winners of various STEM competitions across the nation. The fair was started as part of Obama’s Educate to Innovate campaign, under which the president issued a challenge to educate a hundred thousand effective science and math teachers. This challenge has received an $80 million federal investment as well as a $22 million commitment from the philanthropic and private sector (The White House, 2012). Despite the government’s large investment and the Obama Administration’s commitment to increasing the number of STEM graduates entering the workforce, the issue of attracting talent to work for the public sector remains a challenge.

The ideological debate over the size of government has drowned out the more important debate over the goals of government and how to reach those goals effectively. Most Americans accept as a given that modern societies and economies require activist governments; however, governmental activism should not be confused with political liberalism or with any specific goal. A government can be quite active and yet have a goal of preserving the status quo. Most Americans believe that an activist government is needed if we are to preserve our way of life. To minimize costs, this activist government must also become more effective. A new style of management is needed if we are to enhance government’s effectiveness.

If you have read this far, you are probably interested in the concept of effective public management and may be interested in learning how to become such a manager. The first step is to analyze your own dissatisfaction with the way you’ve seen public organizations operate. Do not focus on the obvious disasters you have seen—the million-dollar or billion-dollar foul-ups. Think about all the little things you thought government organizations should have been able to achieve with ease but were not able to accomplish. That analysis and an unwillingness to accept poor results are the first steps toward effective public management. Many public managers do not realize that there is something wrong. To these managers, public sector failures are system failures rather than individual failures. More often than not, these passive public managers refuse to acknowledge failures. Failures are explained away or are lost in an ocean of reports.

America’s public management is no worse than its private management. If the private sector were truly effective, Thomas Peters and Robert Waterman (1982) would not have had to search for excellence. The weaknesses of our private management have never been more evident than they were over the past three decades of competition with Japanese auto manufacturers and electronics firms. In 2007, Toyota surpassed General Motors and became the world’s largest automaker, and by 2008 and 2009, the federal government had to bail out the American automakers General Motors and Chrysler. At the same time, it is clear that the public sector also needs reform. How those reforms should play out came to reflect, in many ways, some of the fundamental ideas that came out of restructuring the private sector, such as downsizing and contracting out.

Public management is different from private management, and public entrepreneurship is different from private entrepreneurship. Although many techniques of management are interchangeable, private companies and public agencies are governed differently. In addition, public organizations operate within a more rigid set of constraints than private organizations do. Private organizations are constrained primarily by the bottom line and secondarily by a system of laws and regulations, whereas public organizations are constrained primarily by an extremely inflexible set of rules and procedures. The public entrepreneur must understand these differences and learn to operate within these constraints. The next step toward effective public management is to develop a sophisticated knowledge of the constraints under which public agencies operate and the reasons those constraints exist.

The final steps toward effective management start in the mind of the manager and end in concrete actions. First, the public manager must believe that public organizations are capable of producing excellent results. That belief must be strong enough to overcome the inevitable frustrations that the manager will face. Then the public official should adopt the management philosophy once articulated by Franklin Roosevelt: “It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something” (J. Bartlett, 1992, p. 648). Small failures are acceptable if we learn from them and eventually bring about small successes.

Once a public manager believes that success is possible and aggressively pursues every possible course of action to achieve success, that manager has unlocked the secret to effectiveness. The difficult message here is that an effective public manager must take risks to ensure effective performance. The effective manager must learn to judge when caution is prudent and when conflict is necessary. Very little is ever achieved in conflict-free environments. To be effective, a manager must see conflict as an inevitable part of accomplishing goals. If someone in a public agency gets into a fight with someone from another organization, we should not assume that the conflict should have been avoided. It is foolish to pick fights for their own sake, but it is also foolish to assume that all conflicts should be avoided.

In his book Innovation and Entrepreneurship, Peter Drucker (1985) analyzes and demythologizes innovation and entrepreneurship: “Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service. It is capable of being presented as a discipline, capable of being learned, capable of being practiced. Entrepreneurs need to search purposefully for the sources of innovation, the changes and their symptoms that indicate opportunities for successful innovation. And they need to know and to apply the principles of successful innovation” (p. 19).

Innovation is the key to learning to succeed, and it is possible to study the process of innovation. Innovation and entrepreneurship are not only possible, but also necessary for effective public management. Drucker (1985) states that “to build entrepreneurial management into the existing public service institutions may thus be the foremost task of this generation” (p. 187). The appropriate use of innovation cannot be deployed without a thorough understanding of the day-to-day operational issues that managers face—especially how to work with people and manage time and resources.

The remainder of this book addresses the problems public managers face in their daily work. It discusses the context of day-to-day management with an eye toward innovation: how to build the capacity for entrepreneurship and creativity demanded of public managers today. This is not a “cookbook” or a manual. The book seeks to provide an approach to solving the problems faced by public managers. It provides examples of effective public management, but it is intended neither as a comprehensive treatment nor as the last word on the subject. We hope that the book will convince students and practitioners that innovative, effective public management is possible.

Instructor’s Guide Resources for Chapter Two

· Class Presentation (PowerPoint Slides)

· Sample Assignments

· Chapter Summary