Special Challenges

The typical government organization exists within a highly regulated environment, similar to but not as constraining as the typical military organization. However, while the government environment is somewhat less rigid than military, it more than compensates for this by an ongoing challenge to exist and thrive within an ever-changing political environment. The government sector is held to an increasingly greater level of public scrutiny, never before seen in our nation’s history. No one is predicting that will change. Consider the following environmental challenges, which certainly is not an all-inclusive list:

• Inflexible Mission – As with the military enterprise, the government agency does not have the luxury of selecting its own mission. In fact, that mission is thrust upon it.

• At the Mercy of Election Cycles – While the government agency has some continuity as it is largely staffed by civil servants, its mission and major business objections can change at any time based on election cycles that occur every two years.

• Attention Based on Events or Bad Press – An agency may be “teed up” as a “political football” at any time or an event may trigger concentrated political and public attention placed on the agency. In either case, this may result in the agency’s mission or objectives being altered or at least pressured. (Case in Point: The impact of Hurricane Katrina on the Department of Homeland Security’s Federal Emergency Management Agency (FEMA)).

• Taxpayer Scrutiny and Privatization – The tax burdened public is more critical than ever of the value they receive given the money they pay for government services. More and more, government organizations are being measured against commercial industry best practices and are expected to manage themselves “like a business.” In fact, the looming threat for many government agencies is that the fulfillment of their missions could be privatized.

Special Factors Influencing the Value/Price Trade-Off for Government
As with the military environment, the government sector is subject to rigid mission parameters over which it has little control. But because the price of Military mission failure is seen as immediately devastating to our nation, the Military is given certain latitude and flexibility not afforded to government agencies. A government organization may be allowed to deteriorate slowly over a number of years, as the effect of mission failure is usually not so immediate.

• Hands Tied on Procurements – While the military and commercial sectors are usually free to select vendors on the basis of “Best Value” (i.e., a strategically weighted combination of product/service quality and price that will best perform the mission), Federal and State government organizations are usually pressured to select the lowest bidder. In fact, some states require it by law unless good cause is shown for selecting otherwise.

• Inflexible Staffing Paradigms – Most of the government sector labor force is unionized and/or under the direction of civil service rules and regulations. As a result, it is very difficult to reward high achievers, discipline underachievers, create innovative (i.e. non-traditional) job descriptions, and reorganize the enterprise during the life of an existing collective bargaining agreement. Certainly, the government seeks to be a “model example” of fairness to its employees; however, the resulting inflexibility makes it difficult for the enterprise to be agile.

• Inflexible Business Model Parameters – Federal and State governments are often forced to comply with a host of regulations, varying by state and agency, which collectively diminish their ability to “cut the best deal” for their constituents. These include constraints such as:
xxx- Must hire in-state
xxx- Must pay prevailing wage
xxx- Must only hire companies that have special certifications, licenses, etc.
xxx- Long decision-making and approval cycles
xxx- And many more

The Government Value/Price Trade-off

As we have established, the commercial organization is free to trade off levels of value versus price in order to achieve a desired mix that is congruent with its mission and brand strategy. Also, the military organization is highly regulated but is able to select customized, high-value strategies because the consequences of mission failure are universally seen as unacceptable. Due to the myriad of constraints we have identified, the typical government organization finds itself somewhere in the commoditized, price-based strategy domain. Change is slow. Technology is often allowed to go out of date before replacement. Services are commoditized in order to do the most good for the largest number of constituents. It is important to note that this analysis is not a slight to the people in the public sector. In fact, the public sector is filled with people who care about their jobs and their missions. Rather, our analysis would conclude that often these peoples’ “hands are tied” and that many of them will “burn out” over time as they continually try to improve the enterprise, with little or no efficacy.