Copyright 2011: Federal Strategies. Federal Business Opportunities. All rights reserved.
Cultures
Business Cultures
There are frequent claims that government agencies should operate like businesses. Having held most business positions in both government and industry, I see areas where agencies and business differ – and things you should know when doing business with federal agencies:
Purpose: Businesses have many goals, but the primary one is making money. Government, too, has goals, the primary one is spending money. Spending money requires analysis, auditors, and oversight - making money requires the entrepreneur instinct. Agencies serve many masters, operate at deliberate paces, follow set processes, and avoid risks. Businesses serve one master – customers that act with dispatch. Given these, there is really no way agencies can operate like businesses.
People: In business, managing includes hiring, firing, and inspiring. Workers are a resource - they perform functions and add value. In government, “full-time equivalents” or “FTEs” are functionaries - not value-adders per se. The biggest difference is accountability and firing people. Some need to be fired. In business, it's not easy to do so, but it's done all the time. In government, they're generally not. Keeping deadwood aboard creates three agency problems: non-performers don't work; their work must be picked up by performers; and morale drops.
Time: In government, time is long, elastic, often glacial, and sometimes seems infinite. Major and social programs are not accomplished overnight – those projects and budgets are viewed in years or decades. By law, businesses must timely report to investors. In government, eons of time are consumed in meetings with deferred decisions. Businesses have meetings too, but they usually start with objectives, outcomes, and duration.
Money: There's never enough anywhere. In business, that’s a motivator. Some say projects should be cash-starved just to see how resourceful people can be. Businesses function within budgets because they must; if they overspend and don't produce, they're dead. In government, there are four budgets: operating, capital, overspent, and underspent. The first two are self-explanatory. Overspending is often found in major systems spending. But there is also overspending when too much money is thrown at projects. Underspending happens when Congress creates a program, but doesn't fund it, causing many agency people to spend lots of time creating elaborate plans that will never be implemented.
Hierarchy: Both have hierarchy. But in government, regardless of the management chain, there are many other masters. There are many stakeholders: congressional representatives/staffers requesting information, internal oversight and approvals; senior executives outside the command chain, or leader of a virtual IPT teams.
Significant differences. Knowing them can help you identify, win, and profit from federal business.
