Intrapreneurship in the Public Sector

Intrapreneurship – being entrepreneurial in-house – is a hot topic in big businesses. Here, Mike argues that the public sector has more to gain than most.

Intrapreneurship is a hot topic for large businesses, as the City continues to demand higher growth rates than can be expected from the mature markets in which many large firms operate. In the short term, big companies can cheat via a mixture of mergers and creative accountancy, but in the long term these imperial new clothes blow away. Look at old lists of Top 100 companies, and you’ll see that the old adage is true: innovate or die.

We believe strongly that the only way for big organizations to innovate is by unleashing the entrepreneurial skills and passions of their people. Cumbersome venture committees sitting in judgement on endlessly rehearsed business plans just won’t do. Things out there are changing too fast, too unpredictably.

The same does not appear to be true for the public sector. Innovate or don’t bother; it doesn’t matter, because government, ministries, local councils etc. will still be around anyway. But is this true? We believe not. Intrapreneurship is just as important in government as in the private sector.

There are two arguments against our claim, one false but reasonable, the other dreadful.

The fair but flawed argument is that the task of government hasn’t changed, and is not going to change, so why innovate? You just keep on telling people what to do. Maybe you do a little ‘incremental’ innovation, like using the Internet. But there’s no need to change fundamentally. We disagree, for two reasons.

Firstly, it isn’t just the marketplace that is changing ever faster, but society itself. We are more diverse, ethnically, culturally, in the lifestyles we choose – in every possible way. This unending social change is meat and drink to entrepreneurs, who are forever developing new products and services to meet these changes. But it is a challenge to government as well. An inconvenient challenge if you view government as an essentially conservative (with a small c) activity. But an exciting one if you view the role of government as something that is about responding to (let alone driving) change.

Secondly, our expectations of public services are changing. The private sector is responsible for this: we’re used to getting stunning service from certain companies, and are ever less tolerant of the old hypocrisy of ‘your obedient servant’ in Whitehall. Government’s ultimate masters are, thank heavens, the electorate, and the quality of public services is now firmly at the top of every party’s agenda. Do you miss the seventies when this wasn’t the case, and political debate was about the survival of the free market system at all? We don’t (except for the music, but that’s a different issue…)

So modern government is faced by a changing ‘marketplace’ and ever-rising expectations. It has no choice but to innovate. And, exactly like big corporations, it cannot do this by committee, despite its natural instincts to do this. Instead, it must empower its people to experiment, to ask the entrepreneur’s magic question – ‘Where’s the pain?’ – and to develop and test solutions. And to fail, learn, rethink, try again.

Essential examples of public-sector pain are exactly the same as those for large organizations. Are resources being wasted internally? Are there groups of customers being appallingly served? Beyond this is a special problem for government – are agencies hard at work duplicating each others’ efforts? One very entrepreneurial public servant we spoke to recently created a group of like-minded individuals from different departments to address this problem. We need more people like her.

The very bad argument against public sector intrapreneurship is that the people in this sector lack the oomph to do this. It is clearly true that some of them do – but so do many people in large corporations. Intrapreneurship is not for everybody. We believe there is a critical mass of able and imaginative people in most public sector organizations who could make a real difference – and who will make a difference, given the opportunity.

It is probably true that there are more ‘Sir Humphreys’ in the public sector, hard at work resisting change of all kind. But such people exist in big private-sector companies, too. All intrapreneurs have to battle against institutional and personal barriers, wherever they are. There is no excuse to give up on public sector intrapreneurship.

The alternative is grim. Dinosaur-like private-sector companies that refused to innovate were made to pay by the marketplace. If the public sector emulates them, it will just become less and less efficient, always crying out for more of our money and actually spending it ever less wisely.


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