'WE MUST reject the idea - well-intentioned, but dead wrong - that the primary path to greatness in the social sectors is to become "more like a business".' The interesting thing about this proposition, which runs counter to a tidal wave of advice and practice, is that it comes not from an unreconstructed member of Old Labour, but from the author of two of the most interesting and respected business books of the 1990s, Jim Collins.
In Built to Last , co-written with Jerry Porras, and Good to Great, Collins tried to identify what distinguished enduringly excellent organisations from the merely good, and how one could become the other. Now, in a 30-page monograph to accompany what has come to be known as G2G , Collins extends the thinking to the public and social sectors.
This is work in progress, and detailed research is under way, but he is confident enough to present a preliminary conclusion: most businesses lie somewhere on the spectrum between mediocre and good very few are truly excellent.
Many accepted business practices turn out to correlate with mediocrity rather than greatness. So why should we insist on importing such practices into hospitals, universities and charities?
The real distinction is between excellent and the rest, not between business and social, he says. Great companies have more in common with great charity or public-sector organisations than they have with indifferent companies.
Cynics would suggest that 'greatness', after all, is the prism through which Collins looks at things, so he would say that. Yet the insights pass the common sense test (they have evidence to back them, rather than mere ideological belief). Being consistently excellent is largely a matter of fierce discipline - doing essential things well - and that holds good across sectors. Among the essentials are establishing measures of success and tracking progress towards them. It's not good enough to say that success can't be quantified in the public or social sectors of course it can - only the measure relates to purpose, not money.
All indicators, Collins rightly reminds us, are flawed - especially financial ones (see iSoft, Enron and others ad infinitum ). What's important is not identifying one perfect indicator, but separating inputs from outputs, settling on a consistent and intelligent method of assessing output, and tracking the trajectory with rigour. Maintaining the discipline is critical: 'No matter how much you have achieved, you will always be merely good relative to what you can become. Greatness is an inherently dynamic process, not an end point. The moment you think of yourself as great, your slide towards mediocrity will have already begun.'
Overall, Collins believes that pitfalls in the way of building lasting excellence in the public sector, while different, are no greater than in the private sector. In some areas, the social sectors may even have an advantage. Surprisingly, one such area is leadership.
The UK public sector currently sees the idea of leadership, something lacking in the past, as its great white hope. But the last thing it needs is the hard-driving, alpha-male style of leadership so fetishised in the private sector. The kind of leadership that is important can maintain focus and discipline while coping with characteristically complex governance and diffuse power structures - and that's not currently common in business, although it may have to be in future.
Business leaders faced with mobile workers, consumer and environmental groups and regulation can't bank on wielding untrammelled executive power as in the past: they have to lead people who have a choice whether to follow. This skill will be 'even more important to the next generation of business leaders, and they would do well to learn from the social sectors', Collins says.
The social sectors may also have an underplayed advantage in attracting the right people. Using money to 'motivate' is a poor second to having employees motivated by the job in the first place - and public and social sectors, with their sense of mission, do well at attracting such people. 'The right people can often attract money, but money by itself can never attract the right people,' Collins writes. 'Time and talent can compensate for lack of money, but money cannot ever compensate for lack of the right people.'
In fact, the public sector often unwittingly connives with the government in overestimating the importance of financial resources and underestimating the power of people, leadership and a self-reinforcing system to overcome apparent system constraints - as proved by pockets of public-service excellence created by people with the courage to defy centrally mandated methods and establish their own purpose-related methods.
Pointing to the extraordinary finding that, over 30 years to 2002, the top-performing US share was not Intel or Wal-Mart but Southwest Airlines, Collins notes that there are outperformers in the most unlikely and unpromising environments. 'Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline.'
The Observer, 3 September 2006