Converging on Leadership

Leadership dynamics and challenges in the private and public sectors.

Leadership is commonly known as the ability of an individual or group to influence and guide an organization, society or team.

While training opportunities exist to enhance leadership skills, we all undertake both defined and undefined leadership responsibilities in formal and informal settings — be it domestic roles, within peer groups or social organizations. This article will concentrate on leadership in formal business and working environments, particularly in the private and public sectors, with a deeper exploration of public sector leadership. It also will explore the shifting nature of work in the public sector shaped by impending forces and the ever-changing political, economic and technological landscapes as well as the changes brought about by rapid globalization and social equity.

The Private Sector
The private sector constitutes a pivotal segment of a national economy, owned, controlled and managed by private individuals or enterprises. The primary objective of the private sector is profit generation, achieved by offering products and services that cater to consumer needs and desires. Intense competition for consumer spending underscores a customer-centric focus, striving for trust building, market shares and robust financial performance.

Leadership in the private sector thrives on cultivating highly motivated teams and fostering strong succession pipelines. Success is driven by leading from the front, pursuing operational excellence, embracing flexibility and seizing new challenges, particularly in adapting to emerging technologies. A strategic orientation encompasses immediate, medium- and long-term business goals. Leadership demonstrates profound knowledge of business environments, consumer insights, innovations and ensures optimal returns on investments for the major stakeholders, namely, the investors.

Private sector employers use various strategies to attract talent, ranging from hiring fresh graduates, implementing trainee schemes and recruiting mid-career professionals to placing seasoned experts in relevant positions. Emphasizing organizational onboarding, training and coaching processes for all new employees is integral.

Success in private sector careers hinges on robust teamwork and individual accomplishments complemented by collaborative contributions. There also must be an in-depth understanding of company culture, product knowledge, competitive landscapes and team capabilities. There must also be investments in employees’ capabilities and knowledge building to catch up with trending competitive and global initiatives to drive the growth of the organization into the future.

The Public Sector
Public sector organizations operate differently, funded by taxpayer money and government donations. They are not profit driven, and their programs are sustained by the public’s financial contributions. Government decisions dictate how tax funds are allocated in the public sector, making it accountable to the people.

Differentiating characteristics between public and private sector leadership include unique environmental factors. Moore and Khagram (2004, pp.5-8) highlight three key differentiators:

• Sources of Revenue: In the public sector, the primary source of funding, encompassing both financial capital and operating revenue, differs significantly from the private sector. Unlike the private sector, where investors and consumers drive financial decisions through individual choices to invest and purchase, public sector financing is derived from taxpayers and their elected representatives. These representatives make deliberate decisions on how funds are allocated, considering the perceived benefits that justify levying taxes within the community.
• Management Discretion: Generally, leaders in the public sector experience relatively limited discretion in defining the purpose and strategic priorities of their organizations, primarily due to the influence and constraints imposed by the political environment.
• Performance Measurement: Public sector leaders arguably face a greater challenge in objectively measuring organizational performance compared to their private sector counterparts. This difficulty is especially pronounced when quantifying environmental and social impacts while simultaneously upholding political accountability.

The key feature underpinning all of this is that public sector leaders are less driven by bottom-line profit, but rather have a greater focus on achieving what Mark Moore calls “public value.”

Leaders in the public sector are encouraged to demonstrate initiative and innovation, aiming to drive positive social outcomes that benefit communities while adhering to stringent accountabilities and ethical standards. Public sector agencies prioritize leadership by placing it at the core of their strategic agenda, investing in targeted initiatives to optimize and transform their workforce, ensuring relevance, competitiveness and the delivery of public value. There is a growing emphasis on providing high-quality, citizen centric services by reducing costs and enhancing systems and processes for streamlined delivery.

The complexity of this task is compounded by an increasing demand for diversified skills among leaders, who must navigate digital adoption and manage geographically dispersed and demographically diverse workforces within a competitive labor market. The skills and knowledge public sector leaders require include agility and adaptability for problem-solving to remain effective and productive with the trending digital, environmental and social governance trends.

Entrance into the public sector occurs through various channels, including direct recruitment of trainees, political appointments, competence-based appointments and the hiring of established public servants based on the requisite skills and opportunities. There should be programs and learning to support the transition of “noncareer” public servants into public sector leadership. A crucial aspect of such onboarding must be including all new employees in learning to comprehend organizational policies, strategic trusts, responsibilities and commitments.

Resource Management
Public sector leaders are expected to operate with limited resources, maintaining a frugal approach and consistently seeking innovative solutions to address challenges. Leadership in the public sector holds exceptional significance, not only shaping the job performance and satisfaction of employees, but also influencing the overall performance of government and public agencies. Effective leadership is pivotal for good public governance, encompassing aspects such as meticulous planning, efficiency, transparency and accountability.

Senior leaders in the public sector typically adhere closely to rules and procedures, providing clear directions on how tasks should be executed. Their focus extends to long-term strategic planning and the creative process involved in establishing trust and relationships. However, the influence of political and community dynamics poses a challenge for public sector senior leaders in motivating their employees. Some may encounter difficulties in creating a positive working atmosphere that inspires individuals to deliver high-quality public services. They need to invest in technologies to motivate some of the employees with remote or hybrid work without negative impacts on productivity and teamwork, and this may help in reducing office space and infrastructure costs.

Conclusion
While leadership skills can be inherent, acquired and taught, the unique skill requirements, responsibilities and accountabilities in the public sector make developing effective leaders particularly crucial.

Leadership in the public sector needs to stay on top of new technologies and their possibilities, while setting the tone of an organization as a great place to work, that is attractive for high performing talents and environment that welcomes all. Leaders need to maintain relationships with people, exert influence beyond boundaries and maintain visibility and ensure their presence is felt across the organization, their networks and communities.

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This article originally appeared in the Spring 2024 issue of In the Lead magazine, from Stillman School of Business’s Department of Management and the Buccino Leadership Institute. The bi-annual magazine focuses on leadership perspectives from the field of health care, with content that is curated from leaders across the industry who share lessons learned from real-world experiences.

Categories: Business, Science and Technology