Business of Government Is To Serve Its Citizens

Few things are as universally dreaded as a trip to the Department of Motor Vehicles. It seems as if, no matter what you need, the experience usually involves pages of paperwork followed by lengthy waits on numerous lines, only to be rewarded with an exasperated "Next!" from a less-than-enthusiastic state employee.

The last time I renewed my New York driver's license, however, all that had changed. In fact, I did it painlessly - through the mail. Somewhere along the line, the DMV got the message that the people it serves were unhappy with their service. So the DMV implemented technology, streamlined its systems and processes, and refocused its energies to fulfill its mission.

Some people might say that the DMV finally decided to conduct itself as a successful business would, offering customers the benefits of technology to provide the best possible service. And many people believe that if all government agencies operated the way businesses do, they'd run more efficiently, more profitably, and more effectively.

There's one problem with that premise, however: Governments are charged with responsibilities that businesses in the private sector aren't. In fact, all too often, the public sector is constrained by four elements that do not affect the actions of the private sector.

* Governments must earn, protect and sustain the public trust, abiding by controls and regulations put in place to discourage abuse of the system.

* Governments must build consensus and earn public acceptance of their actions. Consensus-building is critical in making and executing policy.

* The public sector operates under public scrutiny. The actions of agencies and individuals are conducted with the understanding that everything they do falls within the realm of public knowledge.

* Every action undertaken by a government or its agencies must uphold the public good.

When these points are considered, it's obvious that changing the way government does business isn't the same as running government like a business. Conversely, these points must not be viewed as barriers to change.

Rather than running itself like a business, the public sector can learn how to better serve its "customers" by taking certain cues from the private sector. And don't forget that while there are techniques and processes that are transferable from business to government, there also are certain private sector tools that simply are not applicable to the public sector. For example, in the private sector, management has many different tools it can deploy to drive change, not the least of which is the ability to hire and fire employees, quickly and with few constraints. That is not possible in a public sector staffed with elected officials, civil servants, and tenured positions. Such rapid change can damage the public's perception of its leadership and destroy public trust.

An important lesson to be learned is that the private sector, too, can get it wrong. Both the private and public sectors are under increasing pressure to show "results." In the private sector, that translates to earnings per share and stockholder value. Remember the late 1980s and the early 1990s? Cost structure was the first thing companies analyzed in their effort to create value. Resulting layoffs slashed costs, demoralized workers, and drained many of those companies of their greatest asset - employee experience and knowledge.

There is a lesson from the private sector that applies to government: Know your costs. Unlike most governments, the auto industry knows how much it takes to manufacture its latest model, down to the tiniest components and most complex processes. Do you think Average City, USA knows exactly how much it costs to repair potholes or operate a government office building?

Another private sector lesson: Choose your mission, do what you do best, and get others to do everything else. Take Buffalo, N.Y. For years the city government operated and maintained a beach located on the city line. Last year it handed that responsibility over to the county. The city fathers finally realized they didn't know how to run a beach, and they were doing the citizens of Buffalo a disservice by not providing the best possible beach they could.

Governments should provide the services the public needs that others cannot provide; they have no business being everything to everybody. They must identify those services the public needs or is clamoring for; determine what services currently are being provided and at what levels; deliver the services they are best at; then jettison the rest to competent, reliable outside providers.

What it all boils down to is that the public demands - and deserves - value, whether buying an automobile or renewing a license at the DMV. Governments must learn to do what they're best at, because at the end of the day that's what the public wants. And, no matter what business you're in, if you're not giving the public what it wants, you're going to disappear.

* Jack Miller is national managing partner for public services at KPMG Peat Marwick LLP, an international consulting and auditing firm in New York.