First published in the Financial Times on the 22nd January 2013.
Creative individuals can produce the original solutions that taxpayers require
The challenges faced by the developed world are considerable: ageing populations, government and household debt, unemployment, inflation and a lack of economic growth – just to name some major issues. Entrepreneurs and the private sector can address some of these problems, but many activities will always be carried out by the public sector – policing, education and healthcare, for example.
Unfortunately, those in charge of the public sector do not generally understand or even know any entrepreneurs. Public servants tend to be more risk averse and comfortable within institutions, while entrepreneurs are more likely to be independent and motivated by profit. Generally speaking, the two personality types are philosophically and psychologically different. Too often they operate in completely distinct spheres, and have almost nothing to do with each other.
But society misses out from this lack of engagement. Our schools, hospitals, fire stations, town halls, courts and other taxpayer-funded services could always be better: more productive, innovative, efficient and operated by more motivated staff. Entrepreneurs spend their waking hours trying to improvetheir companies. Surely our public services could learn from their mistakes and successes?
Moreover, the majority of entrepreneurs would gain personally from helping the public sector by providing advice and making use of their hard-won experience. Too many business founders can be obsessive about their creations, to the exclusion of almost everything else. Working with headmasters, fire officers, social workers and prison governors can enlighten and broaden the horizons of those who spend their working lives in business.
For the past 10 years I have spent as much as a day a week working with several charities, a university, a state broadcaster and various social enterprises as a non-executive director or equivalent. It has been highly educational and rewarding – although not financially, of course. Giving my time has been more important than giving money. Working with non-profits – be they small, community charities or major government-owned undertakings – has given me a far better understanding of the complications of working outside the private sector.
Entrepreneurs need to realise that non-profit organisations are not the same as the private sector. Their return on investment is the public good they deliver. They have many stakeholders, are usually highly regulated and publicly accountable, frequently unionised, often bureaucratic and poor at change.
Most entrepreneurs are not natural non-executive directors and some find the role frustrating. But learning how to play the part of a steward and custodian, not just an owner, is worthwhile. Some never make the adjustment. Many self-made individuals are used to rapid decision making and short chains of command. Government bodies are hierarchical and monopolistic; they cannot be easily analysed through financial statements. But I have worked with entrepreneurs across the arts, education and healthcare sectors who have been valuable contributors.
Their knowhow in areas such as people management, cost control, procurement, IT, legal affairs, outsourcing, property, media and fundraising can help bring about better outcomes for citizens. The idea is not to privatise or subcontract public services wholesale but to see entrepreneurial spirits as a resource to tap where relevant. For nations in the west to maintain their welfare states and standards of living, we need to access all the ingenuity and brain power we can because the current models of state delivery are unsustainable.
Finding the right roles for entrepreneurs is not straightforward. Headhunters, civil servants and appointment committees need to cast their nets wider, rather than just fishing in the usual politically correct pools of candidates. Those who have built impressive enterprises from scratch have much to offer. Such creative individuals are bold and unconventional – possibly able to propose original answers that taxpayers and politicians desperately need in these straightened times. Of course, many tycoons start their own foundations or charities because they prefer it that way. But whichever route they adopt, all entrepreneurs should try to jump on board – it’s worth it.