Re­form­ing a Pub­lic Sec­tor En­ter­prise

Enterprise - - OPINION - By Tabish Gauhar Chair­man, Board of Di­rec­tors, Karachi Elec­tric Sup­ply Com­pany

What is a pub­lic sec­tor “mind­set”? In a monopoly sit­u­a­tion, es­pe­cially in an es­sen­tial pub­lic ser­vice cat­e­gory, the cus­tomer is taken for granted – he re­ally doesn’t have a choice, af­ter all. He is sup­posed to chase you, not the other way round. In a pub­lic sec­tor en­ter­prise (PSE), em­ploy­ees are rewarded for longevity of ser­vice, not as­sessed against es­tab­lished bench­marks or key per­for­mance in­di­ca­tors (KPIs) – a per­for­mance cul­ture is not em­bed­ded in the or­ga­ni­za­tion’s DNA. It is al­most im­pos­si­ble to weed out the non-per­former and the cor­rupt from within the sys­tem, given the overly com­pli­cated set of ser­vice rules, laws and reg­u­la­tions gov­ern­ing the em­ployer-em­ployee re­la­tion­ship. More of­ten than not, a PSE is used by the rul­ing govern­ment as a po­lit­i­cal tool (through their in-house prox­ies) and a dump­ing ground to cre­ate em­ploy­ment op­por­tu­ni­ties for loy­al­ists – hav­ing the “right num­ber of right peo­ple at the right place” is a very alien con­cept. Very lit­tle, if any, long term plan­ning is done, and most of the de­ci­sions are made on an ad hoc ba­sis. There’s a bud­get but no con­cept of a “bot­tom line” – un­like a pri­vate com­pany, there’s no Bal­ance Sheet, P&L or Cash Flow State­ment to man­age be­cause, in the end, the State will foot the bill and plug the hole. There’s absolutely no in­cen­tive to im­prove ser­vice or grow the op­er­a­tions. There’s lit­tle in­cli­na­tion to take a busi­ness or a com­mer­cial view on any is­sue. Po­lit­i­cal in­ter­fer­ence is tol­er­ated by the top man­age­ment since most of them owe their jobs to their po­lit­i­cal masters.

To the con­trary, a pri­vate sec­tor “mind­set” is purely cus­tomer-cen­tric, where ev­ery ac­tion of the or­ga­ni­za­tion is geared to­ward re­tain­ing and grow­ing the cus­tomer base through im­proved prod­ucts and ser­vice qual­ity. Cus­tomer is the King, not to be taken for granted be­cause more likely than not, he’d have a choice to switch to one of the com­peti­tors. A KPI-driven per­for­mance cul­ture pre­vails within the or­ga­ni­za­tion, where there’s no such thing as job se­cu­rity un­less the em­ployee per­forms his job with in­tegrity and pas­sion and meets the set ob­jec­tives. A pri­vate sec­tor com­pany fo­cuses on its core com­pe­ten­cies only and out­sources all non-core func­tions to third par­ties that can pro­vide the same set of ser­vices much more ef­fi­ciently – it knows its pri­mary pur­pose of life and does not ven­ture into ar­eas that can be bet­ter per­formed by oth­ers. To achieve the trans­for­ma­tion from a pub­lic sec­tor to a pri­vate sec­tor “mind­set” re­quires a re­formist leader or lead­er­ship.

A re­formist leader is never in a pop­u­lar­ity con­test; he seeks to do the right thing at the right time, al­ways keep­ing the end goal and the big­ger pic­ture in mind, and not fo­cused on the next day head­lines or short term earn­ings as his guid­ing prin­ci­ples. His­tory teaches us that all “trans­for­ma­tive” ideas are met with skep­ti­cism and of­ten down­right hos­til­ity in the be­gin­ning, but are sub­se­quently em­braced as “thought lead­er­ship”.

The re­formist leader be­lieves in ac­tive com­mu­ni­ca­tion, in­ter­nal as well as ex­ter­nal, but re­al­izes that some in­for­ma­tion is to be shared on a “need to know” ba­sis and that or­ga­ni­za­tions are not “democ­ra­cies” where the ma­jor­ity view is al­ways deemed cor­rect – which is why it’s in­deed “lonely at the top” be­cause the buck stops with him. He, how­ever, in­spires and builds an in­ter­nal “coali­tion of the will­ing” to drive through the re­formist agenda against the in­evitable re­sis­tance from the forces of sta­tus quo.

He man­ages ex­pec­ta­tions by un­der-promis­ing and over-de­liv­er­ing; he keeps em­pha­siz­ing that per­for­mance im­prove­ment is rel­a­tive and should not only be mea­sured in ab­so­lute terms in a turn­around sit­u­a­tion. He un­der­stands and ac­tively com­mu­ni­cates, with­out sound­ing de­fen­sive, that it is un­re­al­is­tic to cre­ate an is­land of ex­cel­lence in a sea of tur­moil and chaos, but he never loses hope. He ap­pre­ci­ates that there’s no magic wand or Eureka so­lu­tion to the sys­temic/struc­tural is­sues faced by the or­ga­ni­za­tion, but a clear vi­sion/ mis­sion/ strat­egy/busi­ness plan needs to be ar­tic­u­lated and put into ac­tion through a con­sis­tent set of “roll up your sleeves” com­mon sense ac­tions, day in day out, and the re­sults will in­evitably start speak­ing for them­selves.

He does not be­lieve in spin doc­tor­ing, cre­at­ing a false sense of suc­cess when none ex­ists – in­deed, he puts his head down, keeps at it, and let oth­ers start ac­knowl­edg­ing (al­beit be­lat­edly and be­grudg­ingly) the tan­gi­ble signs of re­cov­ery and bet­ter per­for­mance. He does not hide the facts, chal­lenges, and fail­ures – and seeks pa­tience from his stake­hold­ers, es­pe­cially the pub­lic at large that will judge him by his ac­tions not words (any con­tra­dic­tion be­tween the two, and he might as well join pol­i­tics!).

A re­formist leader knows that no or­ga­ni­za­tion can or should re­volve around in­di­vid­u­als or per­son­al­i­ties – and un­less the SYS­TEM is fixed and put on a solid, sus­tain­able foun­da­tion, the mis­sion will never be achieved.

There is no sub­sti­tute for pas­sion and in­tegrity. Com­pe­tence can, how­ever, be hired or sup­ple­mented by sur­round­ing one­self with peo­ple who are more com­pe­tent than the leader in var­i­ous as­pects of gov­er­nance. Which is why, a re­formist leader is never afraid of los­ing his job. In fact, he least cares about his chair and his only driv­ing mo­ti­va­tion is to make a mean­ing­ful dif­fer­ence and let

his­tory judge him in the end. He has to be self­less; not in it for the perks, priv­i­leges, fame, so­cial ac­cept­abil­ity, net­work­ing, etc. For a re­formist leader, it’s never a 9am to 5pm “job” but a life’s mis­sion with an acute sense of pub­lic ser­vice re­spon­si­bil­ity; oth­er­wise, it would be the most thank­less job imag­in­able.

It is im­por­tant for a re­formist leader to per­son­ally see the ground re­al­ity within the or­ga­ni­za­tion – never to­tally rely on the ad­vice and feed­back from a kitchen cabi­net or bunch of se­nior staffers. There’s sim­ply no sub­sti­tute to talk­ing to and learn­ing from the front line soldiers fight­ing the bat­tle in the trenches; they are the real un­sung heroes and their feed­back re­flects the true pic­ture, not some glossy re­port or ex­ec­u­tive sum­mary pre­pared in the head of­fice with the help of out­side con­sul­tants! Whilst this may seem a pretty ob­vi­ous point, the re­al­ity is that it takes a lot of time and en­ergy to tour the sites, etc. and most lead­ers tend to avoid that, at their peril.

Bal­anc­ing the in­ter­est, needs, and wants of a di­verse set of stake­hold­ers is al­ways a tricky propo­si­tion for a re­formist leader but of para­mount im­por­tance – it should never be a zero sum game. How­ever; in other words, one stake­holder should not be will­fully ben­e­fit­ted at the ex­pense of an­other. Take a pri­va­tized util­ity com­pany as an ex­am­ple, which would count amongst its stake­holder uni­verse the fol­low­ing en­ti­ties: (1) cus­tomers – res­i­den­tial, com­mer­cial, in­dus­trial, strate­gic, etc.; (2) share­hold­ers; (3) em­ploy­ees; (4) lenders; (5) sup­pli­ers/ven­dors/ con­trac­tors; (6) fed­eral/provin­cial/lo­cal gov­ern­ments and the reg­u­la­tor; (7) me­dia – elec­tronic and print; (8) po­lit­i­cal par­ties; (9) NGOs/con­sumer pro­tec­tion lob­bies; and (10) law en­force­ment agen­cies – all of the above not in any par­tic­u­lar or­der of im­por­tance. Try­ing to be con­sis­tently fair to all th­ese stake­hold­ers, es­pe­cially in a turn­around sit­u­a­tion, is ba­si­cally a thank­less job and whilst, there’s no pre­scribed for­mula or case study to achieve the right bal­ance, all you can strive for is a de­gree of “fair­ness” that will al­ways re­main sub­jec­tive and qual­i­ta­tive in its anal­y­sis. Hav­ing said that, ev­ery re­la­tion­ship ought to be a two way street – by way of ex­am­ple, po­lit­i­cal par­ties ex­pect a lot from or­ga­ni­za­tions pro­vid­ing es­sen­tial pub­lic ser­vice but do very lit­tle (if any­thing) to re­cip­ro­cate by help­ing re­solve some of the key pol­icy is­sues faced by that or­ga­ni­za­tion that are out­side its rea­son­able con­trol. There­fore, a cer­tain level of ten­sion will al­ways re­main in this equa­tion, such that an or­ga­ni­za­tion is ex­pected to give but equally en­ti­tled to re­ceive its fair and due share from the other stake­hold­ers.

In a rapidly evolv­ing world, the only con­stant in life is change, so whilst stick­ing un­com­pro­mis­ingly to the fun­da­men­tal val­ues and prin­ci­ples, a re­formist leader learns to adapt and is flex­i­ble enough to re­spond to ex­ter­nal changes as they oc­cur. He should play his in­nings to the best of his abil­i­ties, with pas­sion, and not take him­self too se­ri­ously! It’s re­ally not about him, but about the cause he’s try­ing to cham­pion. Re­spect does not come from ti­tles but from ac­tu­ally mak­ing a mean­ing­ful pos­i­tive dif­fer­ence in the lives of oth­ers, es­pe­cially the “small guy”. There is no sub­sti­tute for de­ci­sive­ness, un­wa­ver­ing dogged de­ter­mi­na­tion, and bloody mind­ed­ness to achieve the ob­jec­tive against all odds and crit­i­cism – re­mem­ber, it’s not a beauty con­test, let his­tory be the ul­ti­mate judge.

Bu­reau­cracy is in­evitable in a large scale or­ga­ni­za­tion, but a re­formist leader doesn’t al­low him to be a slave to it, oth­er­wise, all he’ll get is more of the same. Hav­ing the right set of in­ter­nal con­trols and pro­cesses is like car brakes that should al­low the or­ga­ni­za­tion to drive faster; time is of essence;

In sum­mary, there’s no rea­son why our bleed­ing pub­lic sec­tor en­ter­prises (Rail­ways, PIA, Steel Mills, KWSB, WAPDA, to name just a few) can­not be re­vi­tal­ized un­der an able and em­pow­ered pro­fes­sional lead­er­ship team that has noth­ing per­sonal to gain from it other than leav­ing a last­ing legacy be­hind. Frankly, we don’t need im­ported ideas or in­deed per­son­nel to do that; there’s a wealth of tal­ent, com­pe­tence, and ex­pe­ri­ence avail­able in the coun­try that can read­ily be uti­lized for the turn­around. One size def­i­nitely won’t fit all; pri­va­ti­za­tion is not nec­es­sar­ily the so­lu­tion in each case; but good gov­er­nance has to be the com­mon de­nom­i­na­tor and whilst that’s be­come al­most a clichéd state­ment to make th­ese days, it can­not be over em­pha­sized.

Good gov­er­nance is ba­si­cally just a fancy phrase for do­ing the right thing! The PSEs need to run as busi­nesses and grow, so that the size of the over­all eco­nomic pie in­creases to ac­com­mo­date ad­di­tional white and blue col­lar work­force. The bu­reau­cracy needs to un­der­stand that it’s not a sin to make a profit, and that their pri­mary role is not just to reg­u­late but also fa­cil­i­tate eco­nomic ex­pan­sion and wealth cre­ation. Ced­ing “con­trol” is a dif­fi­cult par­a­digm shift, so is change in mind­set for both bu­reau­cracy and the politi­cians alike, es­pe­cially in a de­vel­op­ing coun­try like ours, but we need to de­velop a national con­sen­sus on it through an hon­est and open pub­lic de­bate. Pro­duc­tiv­ity gains and ac­count­abil­ity can only be achieved when there’s an ef­fec­tive “re­ward and rep­ri­mand” pol­icy in place, ap­plied con­sis­tently. In the end, it’s about hav­ing the right peo­ple at the right place and let­ting them suc­ceed.

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