2004 - Private versus public sector leadership
A recent debate at Chatham House
in London concluded that companies produced far
better leaders than those in the public sector.
I had trotted along to the debate with an open
mind on the proposition. On balance, I expected
to agree with those favouring the private sector.
How could anyone argue the case of a public sector
commonly perceived as comprising a series of over-staffed
bureaucracies supporting tiers of administration?
The outcome was probably inevitable
given the strong private sector representation
in the audience. But they didn't get my vote.
At the start it may have been a combination of
bloody-mindedness and a desire to intervene on
behalf of the underdog but the more the debate
progressed, the more I warmed to the merits of
public sector leadership.
Rob Davies, managing director
of Water for Fish, the Henley-based human resources
consulting business that hosted the event, argued
that the public sector could not match the agility
of entrepreneurs who could pick themselves up
and start again if their businesses failed.
He had a point. There is something
heroic about the determined entrepreneur who succeeds
in the face of adversity. Tim Waterstone, the
founder of Waterstone's, the bookseller, singled
out the public sector's inability to replicate
the private sector's willingness to take risk
as a persistent failing.
In doing so, however, he exposed
the flawed nature of such a debate. The demands
of public and private sector are simply not comparable.
As Dame Patricia Hodgson, former chief executive
of the Independent Television Commission, pointed
out in defence of public services, a hospital
cannot afford to fail. It has to be there for
The reality is that both sectors
need leadership and there are good and bad examples
to be found on either side of the divide. The
whole corporate governance debate on both sides
of the Atlantic has been founded on business scandals.
The foundering of so many reputations led to the
"anti-charisma" sentiments of Jim Collins,
the US management writer who argued that the best
business leaders were quiet backroom types who
didn't feel the need to hog the headlines.
The solid, consistent performers
highlighted in Mr Collins' studies, however, are
not the stuff of newspaper headlines. Nor are
they the stuff of headhunter revenues or private
Today we are seeing a new cadre
of robust business personalities moving into influential
positions: people such as Philip Green, the owner
of BHS and Arcadia Group, and Stuart Rose, the
chief executive of Marks and Spencer. Their colourful
and very public battle for control of the most
famous name in British retailing was a display
of competing corporate egos of a fierceness rarely
experienced since the struggle for Harrods two
Others, such as Allan Leighton,
the former chief executive of Asda, the supermarket
chain, who last week resigned three of his company
directorships, appear to be positioning themselves
in the marketplace. With corporate deals involving
billions and the incomes of the biggest players
trailing not so very far behind, it is easy to
overlook the contribution of public servants.
But just occasionally we have
the briefest glimpse of the kind of moral decisions
that can confront a public servant. Craig Murray,
the UK's ambassador to Uzbekistan, was recalled
to London after questioning the use of intelligence
from torture victims in Uzbek jails.
It would be facile to ask how
many private sector executives would have spoken
out in this way. Private sector bosses do not
tend to face the kind of life and death decisions
confronted every day, for example, in the health
Some of those who possess a strong
sense of public service may be unsuited to the
realities of private competition. Equally there
have been unsuccessful public sector moves from
the private sector. In 1995 Derek Lewis was removed
from his job as director of the Prison Service
after two murderers and an arsonist escaped from
A subsequent inquiry concluded:
"Any organisation which boasts one Statement
of Purpose, one Vision, five Values, six Goals,
seven Strategic Priorities and eight Key Performance
Indicators without any clear correlation between
them is producing a recipe for total confusion
No wonder Francis Wheen was moved
when he included that quote in his recent book,
How Mumbo-Jumbo Conquered The World, to criticise
the creeping emergence of management gobbledegook
into corporate processes. It wasn't the public
sector that created all that guff.
On reflection, the most worrying
feature of the Chatham House leadership debate
was that the private sector should entertain such
elevated opinions about its management capabilities.
Rarely do we mourn the loss of a corporate leader
by recalling the strength of his or her integrity,
humility and humanity.
Yet all these words have been
used in the past week in a series of fond eulogies
to John Peel, the radio presenter and disc jockey,
who died suddenly of a heart attack. Mr Peel would
never have described himself as a leader and yet
he possessed the kind of qualities that are in
short supply among many companies.
A study by Ashridge Management
School of personality test results among 8,000
UK managers found a dearth of what it called the
"softer" leadership skills that can
best handle people and relationships. The sample
had an above-average representation of left-brained
problem solvers able to think logically but an
under-representation of intuitive types, the very
people who tend to be entrepreneurial.
As a business founder, Mr Waterstone
can identify with such people. But it would be
misleading to suggest that all businesses are
filled with entrepreneurs. They are not. For every
Waterstone's, it seems, there is a WHSmith, struggling
to stay in business after losing its way.
Any future debate should not
dwell too long on the relative merits of public
and private sector leadership but about the rarity
of moral leadership in today's society. In the
week that the world's most important leadership
election has been fought out across the US, perhaps
the most influential intervention in the whole
campaign was made, not by the candidates, but
by their most bitter antagonist Osama Bin Laden.
A single blurred videotape managed
to galvanise voting intentions in a way that failed
to happen after a series of sterile stage-managed
debates. In a country that is crying out for leadership,
it did not augur well.
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