During my six years as an accidental bureaucrat, after spending twenty-five years in the private sector, my friends often wondered how I could do it. They routinely asked versions of the question: doesn’t government move too slowly for you? My standard reply was that, yes, the public sector moves slowly — but then, big companies don’t move so quickly either. And come to think of it, I teased my friends in higher education, colleges and universities move more slowly than either business or government! The point is, all institutions move slowly.
What surprised me wasn’t how slowly the different institutions moved, but the different language, behavior, secret handshakes, and views of each other I found across sectors. Xenophobia runs rampant within public, private, non-profit, and for-profit silos. Each silo has created its own world completely foreign to inhabitants from other sectors. Visiting emissaries are always viewed with skepticism. (“I’m from the government and I’m here to help …”)
One epiphany from my immersion into the non-private sector is how strenuously social sector organizations resist the notion they have a “business model.” Non-profits, government agencies, social enterprises, schools, and NGOs consistently proclaim that they aren’t businesses, and therefore business rules don’t apply.
Well, I’m sorry to break the news, but if an organization has a viable way to create, deliver, and capture value, it has a business model. It doesn’t matter whether an organization is in the public or private sector. It doesn’t matter if it’s a non-profit or a for-profit enterprise. All organizations have a business model. Non-profit corporations may not be providing a financial return to investors or owners, but they still capture value to finance activities with contributions, grants, and service revenue. Social enterprises may be mission-driven, focused on delivering social impact versus a financial return on investment, but they still need a sustainable model to scale. Government agencies are financed by taxes, fees, and service revenue, but are still accountable to deliver citizen value at scale.