Posts Tagged ‘Public sector’

Edition 5: The World Economic Forum

Friday, June 11th, 2010

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In this edition of the Business21C Weekly we talk to Adrian Monck, Managing Director of the World Economic Forum and his former colleague Gay Flashman, CEO of digital communications agency, Formative.

We pushed our friendship with Adrian Monck to the limits by dragging him into the Business21C Weekly studio the day after his hugely successful evening at the Sydney Opera House, An Evening in Davos to continue the conversation. What is the World Economic Forum? Where is Davos? And who is Davos-man? (He is rarely a woman, it seems). Finally, how do we get onto the Davos guest list?

Every year 2,500 world leaders in business, in government, in academia and the arts gather in a mid-sized Swiss ski resort. The code is, leave your entourage at home and check your ego in at the door. However powerful you are, the person behind you in the queue for lunch is probably President of a larger country, a bigger company, or has more Nobel prizes to his (or possibly her) name.

What gets done? What global issues are on the agenda? What is the Davos magic? What else is in the World Economic Forum’s portfolio of activities? And who sorts out the accommodation when there are more presidents in town than the town has presidential suites?

Gay Flashman, experienced broadcast journalist turned social media mover, and former colleague of Adrian’s at Channel 5 in the UK, turns the conversation to the 1.5 million Twitterers that follow the WEF. What can other businesses learn from the WEF social media strategy. And what is stopping them?

Accessible tourism: linking demographic change and social sustainability to business success

Thursday, April 29th, 2010

Cities and organisations have responsibilities for citizens of all abilities. Associate Professor Simon Darcy asks, how can spaces, places and experiences be framed to provide an equality of experience?

The United Nations’ Convention on the Rights of Persons with Disabilities guarantees people with disabilities access to all areas of citizenship. The 650 million people with disabilities and estimated 1.2 billion people over the age of 60 by 2020 are both a significant challenge and market opportunity for cities and service industries.

I led a research team in the Visitor Accessibility in Urban Centres project funded by the Cooperative Research Centre for Sustainable Tourism.

The research focused on accessible tourism – covering visitors with mobility, vision or hearing impairments or learning difficulties – who are estimated in the report to account for 11% of the total tourism spend in Australia.

The motivation behind the study was to discover the quintessential experiences of Sydney, as the national tourism gateway, from the point of view of the accessible tourism market.

The findings have been broad-ranging with the potential to be ground breaking. The research looked not simply at what accessible tourists ‘can’ or ‘can’t do’, but at the quality of experience they have when they do their tourist thing in and around Sydney’s central business district, Rocks area and Harbour foreshore.The aim was to create a process incorporating universal design and inclusive practice for developing information, marketing and promotion approaches that would provide tourists with access needs with a framework to make informed choices for their tourism intineries.

The project was based on a participatory action approach that worked with major industry stakeholders and service providers to identify what first rate accessible experiences existed and to create an understanding that these are valuable offerings to travelers with access needs.

Many of the service providers had not considered tourism as a component of their operations. What was exciting about this study was that no new accessible experiences were created for the project, instead all the experiences identified were already occurring within the stakeholder and service provider operations, and needed to the reframed within an accessible tourism context and collaboratively marketed.

Accessible tourism is about access for tourists with a range of impairments, from the most readily recognizable needs of wheelchair users for continuous pathways to attractions, way-finding routes and so forth, to alternative communication strategies for people with vision and hearing impairments. Strategies that benefit people with disabilities often translate into benefits for other sectors of the community including people from non-English-speaking backgrounds, families with children in prams and employees who require safer working environments.

The starting point of the study was to consider what would any tourist visiting Sydney want to experience: the views, the Manly Ferry, fish and chips by the water, a sense of the history of the original colony, perhaps. The restricted starting point of what people with disabilities can or can’t do was ignored. After all, few tourists want a list of do’s and don’ts. They want accurate information to enable informed decisions about how to enjoy the city they are visiting. The accessible building blocks of any trip were brought together – transport providers, wayfinding maps, toilet locations – so that planning could be done in the one the virtual location.

The next step involved discovering 20 accessible destination experiences that could be used for tourists with access needs. The Art Gallery of New South Wales’ popular monthly Auslan (Australian sign language) interpreted after-hours gallery tour, allows hearing impaired visitors to engage with the guides and the venue more thoroughly than any written guide ever could; The Royal Botanic Gardens’ Aboriginal Heritage guided tour where people with vision impairments can touch and feel the plants – crush the leaves between their fingers, appeals to an innate desire of many tourists to engage in a sensory experience of a new place, its food, the wine, the song and dance, the aromas.

The report also uncovered opportunities for deeper understanding of the experience of tourists with access needs, and to improve the service offerings. One bugbear, particularly for mobility impaired travellers is finding suitable and enjoyable accommodation.

In Sydney, a key feature of quality accommodation is a view. Yet in the whole of the Sydney CBD and tourist district, there are currently only four accessible hotel rooms that have a Sydney Harbour view and six with a Black Wattle Bay view. Architects may meet the building requirements by including accessible accommodation, but these are often located in the least attractive part of the hotel – near the delivery dock or loading bay, or over a back lane. Such rooms simply do not provide a quality Sydney experience. One hotel actually converted a room with a view to cater for celebrity wheelchair user Christopher Reeve’s visit in 2003, but converted it back to non-accessible once he had left.

On the other hand, some hotels have understood the opportunities of the accessible tourism market, even catering for cultural differences in what is understood by ‘accessible’ in different parts of the world. Wheelchair users from western cultures are most likely, for example, to expect access to a roll-in shower. In Asian cultures, however, wheelchair users will expect to have a bath, and will look for accommodation with transfer-over baths. Some of the big chains have successfully developed a niche market servicing these customers.

The Visitor Accessibility in Urban Centres report, has a wider application, both in establishing the value of the accessible tourism dollar to the Australian economy through using mainstream economic modeling techniques in conjunction with Professor Larry Dwyer of UNSW. The economic modeling showed that tourists with access needs already accounted for a significant 11% of tourist spending, or $4.8bn. Yet they encountered many constraints to what most other members of the public visiting the city would consider to be essential.

The final aspect of the research was to create the www.sydneyforall.com portal that provides quality information for tourists with access needs looking for accessible destination experiences. The portal also provides opportunities for collaborative marketing and branding activities for the organisations and experience providers. In the 18 months of operation, it has received over 20,000 hits from 110 countries and has received a number of awards for access innovation. The City of Sydney has recently provided a further grant to extend the precinct cover to Darling Harbour and to include an accessible accommodation section.

Ultimately, accessible tourism in Sydney is an issue of equity, economics and citizenship. Quite simply if cities and service providers are not preparing for the ageing of the population and the increasing expectations of people with disabilities, they are not acting in a socially sustainable manner. Dr Darcy’s report argues that in meeting the needs of this significant group of visitors tourism providers can strengthen their business across all market segments and build a niche within a dynamic and ever evolving group of travellers.

Activists or managers? Employment trends in the third sector

Sunday, October 25th, 2009

46% of recruitment ads for non-profit community services management positions request for-profit experience, reports Jenny Green. What do not-for-profits want in their CEOs, and what does it mean for the sector?

In a study undertaken at the UTS Cosmopolitan Civil Societies Research Centre, Jenny Green looked at 700 recruitment advertisements for non-profit community services jobs from 2002 to 2008. She wanted to find out what organisations were looking for in management and CEOs.

Since the emergence of the New Public Management in the 1980s and 1990s, many not-for-profit organisations and charities – the so-called ‘third sector’ – have looked for managers with corporate backgrounds.

Researchers at the CCSRC have been analysing trends and their implications – particularly the challenge of creeping commercialisation in organisations that often grew out of collective, grassroots social movements.

There are many drivers of change:

  • Marketisation of human services: where organisations receive funding based on the quantity of people they serve (rather than the quality / appropriateness of the service);
  • ‘New Public Management’: the idea that public and non-profit organisations can be better operated along commercial lines, prioritising competition and efficiency;
  • Changing funding models: non-profits no longer receive grants, but project / contract-based funding. They also rely on government money (rather than philanthropy);
  • Changing accountability: ‘upward accountability’ and micromanagement requiring nonprofits to subscribe to government approaches, and to behave like quasi-government agencies

Another significant factor – both a driver and a result – is changing employment profiles, as not-for-profit organisations take on leaders with for-profit backgrounds.

What do non-profit organisations look for in managers?

Of the 700 advertisements, 46% requested corporate / for profit business experience, reflecting a continued interest in commercial experience for non-profit managers. In contrast, only 20% of advertisements specifically asked for experience in the non-profit sector.

83% requested management experience, and only 3% management qualifications. 62% required industry experience (either in the same or similar areas such as aged care, healthcare, education or youth services) and 26% asked for industry qualifications.

69% of entry level management positions in the sector requested management experience. This suggests that non-profit organisations are not ‘growing’ their own experience, but are looking to import it.

Only 24% of advertisements requested values alignment, a strikingly low figure when considering the importance that non-profit / community services organisations place on their values in terms of donors and volunteers. One risk, if leaders don’t share the core values of the organisation, is that ‘mission drift’ may occur as the organisation moves away from its core purpose.

Chairs seek CEOs with similar backgrounds

The study looked closely at eleven non-profit organisations, and interviewed the chairperson of the board selection committee to learn why they chose the types of CEOs they did. In all cases, the chairs sought to employ CEOs with similar backgrounds:

  • For-profit chairs seeking for-profit background in CEO: A typical chair said, ‘unless a manager can run a charitable organisation in a commercial way, it would basically go out of business … it would be inefficient … The commercial side is very important.’
  • Government or non-profit / community services chairs seeking ‘content’ in CEOs: These chairs sought CEOs who had experience in the sector, and who shared the core principles and philosophies of the organisation or sector.
  • ‘Once bitten twice shy’ chairs seeking ‘safe’ candidates who knew the organisation: Chairs who had previously employed a CEO with a for-profit background – but who had not worked out – chose candidates with sector experience and shared values.

Researchers then interviewed the eleven CEOs about their motivations. Those who had moved from for-profit organisations were often motivated by a desire to switch from the intensity of the corporate world, and to ‘do something with meaning’. Some had begun in voluntary work – in childcare organisations, Councils etc – before moving to a career in the sector. A common theme was upward spiralling career paths between government and non-profit organisations.

jenny-green-breakoutAll were tertiary qualified, and nine held postgraduate qualifications in business administration or management. Despite the perception that people need to work in the for-profit sector to develop financial acumen, almost all had postgraduate business qualifications. It’s a myth to think that non-profit CEOs lack financial skills.

With the difference in remuneration, non-profit CEOs are driven by other factors: a commitment to the purpose of the organisation; the prospect of adventure and working in an organisation that is breaking new ground; the possibility of influencing government policy; the challenge of the work; and often a personal connection to the organisation.

Implications for the sector

The current employment climate is complex and demanding, requiring highly developed skills and judgement, and a comprehensive knowledge of people management, organisational administration and the non-profit sector. Prior to the 1990s, there was some movement between government and non-profit sectors, but little from the corporate sector to the not-for-profit. As funding models have changed, NFPs are taking a more commercial approach.

But there are risks in hiring management from a corporate background: the risk that the organisation may lose direction; and that the new leader may not understand the context or culture of the organisation or sector. The drivers for a more corporatized model of service delivery are creating real tension for civil society organisations trying to maintain their role as agents of democracy.

Public sector turbulence in the twenty-first century

Friday, September 25th, 2009

Governments of the future face many challenges in keeping up with their increasingly diverse, mobile and fragmented constituencies. As they adapt, so must the organisations which deliver services on their behalf, writes Dr Bruce Perrott.

Management theory has traditionally been seen as having no place in the public sector. The prevailing wisdom was that government bureaucracies were immortal and that their status quo was difficult to change.

Theorists have observed that public sector reform has been inhibited by an inability to transform and increase their effectiveness, efficiency, adaptability and capacity to innovate – Osborne and Plastik’s so-called ‘self-inventing mechanism’. But the pressure is on to change.

Today’s public sector faces many pressures: governments want efficiency; consumers want better services; and everyone wants cost savings. These differing priorities create tension. In this environment, organisations must be more responsive, more efficient and more flexible.

The drivers of change

The public sector faces financial constraints – a reluctance on the part of governments to increase taxes and expand funding. Technology is increasing both the quality and quantity of information available to agencies, and making it easier to network, reduce operating costs, and make services more accessible. Globalisation is having an effect through accelerated deregulation, global procurement and migration. And where public sector services grew faster than the private sector in the twentieth century, the current trend is for leaner, flatter organisations (Lane, 2005).

According to Lau (2000), contemporary governments face the prospect of:

  • greater economic interdependence with other organisations;
  • fewer government-held monopolies, and greater competition for their services;
  • increasing interaction with international entities;
  • reforms involving increased governance and accountability;
  • changes in the nature and range of public services, and;
  • increasing coordination between governments at sub-national, national and international levels.

All of which leads to pressure: to consolidate, to be more efficient, to be responsive to global trends, and to reduce the cost of management.

The public sector operating environment

The diagram below illustrates the key influences on managerial decision-making and policy in the public sector.

Public sector operating environment

A public sector organisation’s primary purpose is to deliver services to its consumers. The nature of those services, their pricing, distribution and communication, are decided by policy formulated by the minister in charge. So the organisation has responsibilities to both its customers and its management – or in this case its minister.

Other stakeholders include lobby groups and citizen groups that gather around particular issues. Through approaches to their elected representatives or ministers, pressure groups can have a significant impact on an organisation’s priorities.

The interplay between these elements creates a turbulence that in turn affects internal strategy and structure. Each element will have slightly different priorities, and senior managers have to balance them carefully.

Public sector reform

In addition to the contractual arrangements between government and public sector, there are ongoing reforms. Increasingly, these include emphasis on outputs and outcomes, productivity and effectiveness, customer service, downsizing or economy, deregulation or reregulation, decentralisation, privatisation or public-private partnerships, contracting out, and leaner and flatter organisations.

One response has been the development of ‘outline’ strategic plans – rather than the traditional highly detailed ones. These plans establish policy and strategic direction, and set performance criteria for senior managers. But rather than being rigid guidelines, they leave flexibility for organisations to react quickly to changing circumstances using strategic issue management.

A strategic issue is defined as a forthcoming event which is likely to have an impact on the public sector organisation’s ability to achieve its objectives (Perrott, 1993). In turbulent times, strategic issues occur more frequently; hence the need for the effective capture, identification, prioritisation and processing of strategic issues as they emerge.

By building an effective strategic issues management system, public sector organisations are better able to maintain an alignment between their environment, operating strategy and their capability.

Other responses include ‘super’ public sector services – proposed in areas like tax and health – combining many organisations under one umbrella in order to be more efficient and responsive, by sharing resources and cutting costs.

As governments and voters demand more from their public services, the pressure is on.

Not-for-profit: Money for mission or unfair competition?

Sunday, September 20th, 2009

Can a non-profit organisation engage in profit-seeking commercial activities without losing sight of its purpose? Dr Bronwen Dalton explores how.

Complaints from corporate organisations and large private health care providers that non-profits are a source of unfair competition have accompanied the expansion of charitable organisations into the market.

In fact, profit from commercial activities has been one of the fastest growing sources of revenue for Australian non-profit organisations.

According to the Johns Hopkins Comparative Non-profit Sector Project, a survey of 39 countries’ non-profit sectors, Australian non-profits earn more from fees and charges than those in the United States and the United Kingdom.

In Australia, however, complaints of unfair competition have been aired in government inquiries (Department of the Treasury 2001, and the Industry Commission 1995), judicial appeals (Administrative Appeals Tribunal Case 11/2005, 2005 ATC 202) and a wave of media reports.

A report prepared by Access Economics, on behalf of Kellogg’s Pty Ltd, argued that the tax exemption of Sanitarium Health Foods allowed it to significantly undercut competitors:

The market share scale of Sanitarium’s operations in Australia is virtually unprecedented internationally … This speaks volumes for the distorting effects – and tax revenue losses – incurred as a result of the Australian type concessions (Access Economics 2001: 20).

Is non-profit competition fair?

A significant body of research has found that non-profit market participation does not inevitably create an uneven playing field. Professor of Jurisprudence at Yale, Susan Rose-Ackerman, argues that as industry is competitive, investors in for-profit enterprises can still earn market return by anticipating the entry of tax-exempt organisations into the market.

Many argue that an income-tax exemption is not an input subsidy and is thus no more ‘unfair’ to a taxed competitor than are the progressive income-tax rates on individuals who conduct business activities in a sole proprietorship or through a partnership or limited liability company.

An Australia’s Industry Commission report concurred, finding that:

The income tax exemption does not compromise competitive neutrality between organisations. All organisations which … aim to maximise their surplus (profit) are unaffected in their business decisions by their tax or tax-exempt status (Industry Commission, 1995: K5).

The promise of increased revenue and the potential benefits to management practice will continue to entice non-profits into the market. Moreover, if approached in the right way, business venturing can become a cost-effective and sustainable way for non-profits to address social problems and deliver important goods. However, in the process of embarking on commercial activity, non-profits need to tread carefully.

Managing the risks

Externally, they must defend their position, actively participating in debates about non-profit business ventures, by making an informed case regarding its benefits. Internally, non-profits must be attuned to certain risks associated with commercialisation, in particular ‘mission drift’ and a consequent backlash from donors and the wider community.

With a clear focus on mission, and a well thought out strategy for managing the risks of commercialisation, non-profits are in a much stronger position to simultaneously reap the associated rewards and maintain an image of organisational integrity within the community. The ultimate outcome is an increase in their effectiveness as agents of social benefit.

Some of the internal management measures that can ease public concerns as well as manage risk are outlined below:

  • Conduct tailored risk assessment analysis: Not all stakeholders will react the same way towards non-profit commercial activities. Research into how different categories of stakeholders might feel about visible entrepreneurial activity would allow non-profits to have a situation-specific response. Some methodologies available include surveys and focus groups with key stakeholders.
  • Manage the brand (and the brand life cycle): This is principally a marketing and communication exercise that seeks to meet the needs of stakeholders, especially donors, by aligning the intended commercial activities with the non-profit’s humanitarian focus. Strategic use of the media will be crucial in this regard.
  • Know your business partner: In terms of developing partnerships with business, non-profits must develop their capacity to accurately assess risk through due diligence to avoid association with business corporations that could damage the non-profit’s reputation.
  • Use funds for what they are intended: Some organisational assets must be protected from high risk investments – a variation of the ethical wall principle – to avoid exploitation of special resources such as charitable funds and volunteer effort.
  • Financial performance is not the sole criterion of success: Non-profits should equip themselves to manage cultural conflicts that may arise between profit-oriented and mission-oriented groups within the organisation. The lack of common practice around social impact assessment and reporting means that many commercial ventures are judged purely in financial terms, even if social goals are their primary motivation. It is crucial that non-profits develop ways to ensure that social outcomes (not just profitability) become a key measure of performance.
  • Striking a balance: One particularly important skill is the capacity to strike a strategic balance between profitable and mission-contributing ventures and activities. The non-profit organisation must properly manage its portfolio within acceptable bounds of risk tolerance.
  • Transparency and accountability: Transparency and accountability are crucial to creating trust among the multiple stakeholders. These include donors, board members, regulators, paying and non-paying customers, institutional funders, volunteers and others who may be involved in the particular venture or the organisation at large.

Strategy and collaboration

Saturday, August 15th, 2009

A modern city like Sydney faces many challenges and its successful planning and management involves dealing with multiple stakeholders – ultimately every resident. This case study looks at the role and importance of collaboration as a means for organizations to accomplish strategic objectives.

Alan Cadogan, the Strategy Director for the City of Sydney, speaks about the development of Sustainable Sydney 2030, the city’s overarching vision for the years to come.

Watch the full video above, or skip to selected chapters below.

Alan speaks about how he became a strategist and provides an interesting metaphor for why organisations need strategies.

Defining Sydney’s vision for the future included a process of intense consultation with the people of Sydney.

A city like Sydney is a challenging entity to organise. Many activities are  different to those that business organisations deal with.

The consultation never stops. Strategy is an ongoing practice that takes into account changes that occur in the environment.

Collaboration is hard to manage but more effective in the long-term. Building trustful personal relationships is the key to success.