Tuesday, February 17, 2015

Private vs. Public Sector Productivity ... Working On vs. In the System

There are profound differences between private and public sector productivity.

Private sector leadership requires constant efforts to improve the system of satisfying customers and shareholders by offering better values in the marketplace. That's often referred to in the competitive private sector as working 'on the system' and it stands in stark contrast to the working 'in the system' status quo maintenance methodology that currently exists in the public sector.

Working on the system requires satisfying customers and working in the system means doing the same thing over and over again and expecting a different result. Some call that insanity.

Finally, one requires satisfying both customers and shareholders, and the other ignores the overall needs of its 'customer' and 'shareholder' base, aka citizens and taxpayers.

This is all covered succinctly in the following brief commentary about the ongoing demise of electronic stores in the competitive marketplace of customer and shareholder satisfaction. Contrast this with the same old butts in the seats system of public education that has existed essentially without much change for the past hundred years.

Goodbye to the Electronics Store tells the story:

"I was assembling a home audio system recently and needed speaker wires. A friend recommended RadioShack. I went to two . . . but, to my surprise, neither carried any. How could RadioShack, the place Americans go to for cables, connectors, circuits and all kinds of other electronic doodads, not have speaker wires?

I ended up getting speaker wire on Amazon. Later, after failing to find stands for my speakers at my neighborhood Guitar Center — an employee said they were out of stock — I ended up buying those on Amazon, too. Come to think of it, I went online for almost all of the components of my new audio system ....

So I wasn’t surprised to read that RadioShack filed for bankruptcy this month and was planning to sell or shut down all of its 4,000 stores. It is no secret that Internet-based retailers, especially Amazon, have disrupted many brick-and-mortar stores. But they have had a particularly devastating impact on electronics retailers . . . .

RadioShack is hardly alone. In 2009, Circuit City went out of business. And the once popular New York retailer J & R Music and Computer World closed last year.

A big problem for physical stores is that they cannot match the inventory available online....

I’m not nostalgic for the old days when shopping for electronics meant dealing with the hassle of driving to a mall, finding parking and studying inserts in the weekend newspaper for deals. Still, there was a certain excitement about hauling a stereo or computer home. Receiving a brown cardboard box with the Amazon smile logo emblazoned on it is more efficient but feels just a little less satisfying."

Summing Up

Creative destruction is alive and well in the private sector. Customers are either satisfied or absent. So it is with shareholders as well.

Not so in the public sector.

Productivity is essential to progress. Productivity results from competition for the customers' business and shareholders' investment.

Productivity isn't even an afterthought in the public sector.

That needs to change, and that's my take.

Thanks. Bob.

No comments:

Post a Comment