An entrepreneurial spirit taking root in many federal agencies is breathing new life into the way the government does business, according to a new report.
The report, by Government Executive Associate Editor Anne Laurent, says entrepreneurial organizations within government have flourished since the beginning of the Clinton administration, and "intrapreneurs"-employees creating businesses within their agencies-are gaining momentum. The report was funded by a grant from the PricewaterhouseCoopers Endowment for the Business of Government.
"These pioneers are hacking their way out of the stodgy, stovepiped, red-tape-entangled bureaucracy to create new businesses good enough to win work that might otherwise have gone to private-sector firms," writes Laurent.
The report looks at the pros and cons of making government more businesslike, concluding that the movement toward a more "business-permeable" government is inevitable.
Laurent credits the National Partnership for Reinventing Government-formerly known as the National Performance Review-for jump-starting the businesslike government movement in 1993 with its first report, From Red Tape to Results: Creating a Government that Works Better and Costs Less.
On the heels of that report, the Government Management and Reform Act (GMRA) of 1994 established a new franchise business model, allowing agencies to create working capital funds using income from customers to finance current operations, and allowing them to accrue up to 4 percent of earnings annually for major capital investments and management improvements.
Six agencies now have GMRA franchises: the Departments of Health and Human Services, Commerce, Veterans Affairs, Treasury, and Interior, and the Environmental Protection Agency. Congress separately granted the CIA and the Department of Transportation permission to establish franchise-like operations.
The CIA, for example, began operating four enterprises within its franchise: a transportation and storage facility; a telephone service; a motor pool and package delivery services center; and a software development center. With its slogan, "Doing Business Like Business," the agency has customers pay for services out of their own budgets, which makes them prioritize their needs and reduces demand for warehouse services. This strategy saved the agency $6 million in the first year of operations.
The most successful government businesses know how and when to embrace change, the report concludes. Other key characteristics of entrepreneurial government include:
- Strong, savvy leaders who will champion ideas and forge partnerships.
- Cost consciousness and a bottom-line business philosophy when it comes to finances.
- Reliable accounting systems.
- A customer service-driven focus.
- Flexibility and creativity in managing fluctuating workloads.
- Openness to partners.
- An ability to find profitable business niches.
- A willingness to take risks and to make mistakes.
Entrepreneurial Government: Bureaucrats as Businesspeople and other PricewaterhouseCoopers Endowment reports are available at endowment.pwcglobal.com.