Books: Great for public enterprise

In his follow-up to Good to Great, Jim Collins offers a template for a high-performing social sector. An admiring Nigel Crisp suggests areas for further exploration ...

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Last Updated: 31 Aug 2010

Dear Jim (if I may be so bold): you say that almost as many social-sector managers as business managers e-mail you with questions and comments.

May I, as someone who has spent most of my career in public and voluntary organisations, do the same?

I suspect that most public-sector managers will love the way you apply the principles of your earlier Good to Great to the social sector. They may do so, though, for bad as well as good reasons.

You start: 'We must reject the idea ... that the primary path to greatness is to become "more like a business". Most businesses ... fall somewhere between mediocre and good. Few are great. When you compare great companies with good ones, many widely practised business norms turn out to correlate with mediocrity, not greatness. So, then, why would we want to import the practices of mediocrity into the social sector?'

You report that a business audience felt insulted when you told them this. I can almost hear social-sector audiences applauding.

I love your thesis that the real distinction is not between social and business but between good and great. You argue that it takes the same approach to be a great organisation in the social sector as in business and that the framework you set out in the original Good to Great applies equally to both. Each needs disciplined people, thought and action, and a focus on building greatness to last.

Yet you say that the way these principles apply are different. Performance in the social sector is harder to measure, leadership is often diffuse and shared (requiring legislative as well as executive skill), the economic management of an enterprise is not driven by profit, and goals are wider and broader. Hence, you reject the idea of 'becoming more like a business'.

As the recent CEO of the NHS - probably the largest social enterprise in the world - I certainly recognise these features. It required many leaders working together and the alignment of many individual objectives to make progress towards the goal of a healthier population. But we mustn't take this rejection of business too far - which brings me to the bad reasons.

None of this means, as you explicitly state, that the social sector should reject a professional approach to running its organisations and managing performance and finance. Nor that business and businesspeople have nothing to contribute. There are many examples of good partnerships combining the strengths and expertise of both.

I've often been struck by the humility with which senior business leaders speak in private about the social sector and been impressed by the role some have played as non-executives on boards. You suggest this may become increasingly two-way, with social-sector skills needed in business as well as business skills in the social sector. The sectors need each other as advocates and interpreters - roles you play so well in this book.

So much for the bad reasons. But the good are great. You describe success and leadership in the social sector, the passion that motivates people and the skills needed. You also describe how it is still possible to create a 'pocket of greatness' - a great school, hospital or orchestra - as many have done. Such pockets provide inspiration for us all.

You are only part-way through your exploration and analysis of the social sector. Inevitably, there are questions and areas for more thought. Placing it in today's UK context, I wonder how you would use this approach to analyse public/private partnerships. Do the differences between the sectors mean there are limits to the public services that the private sector can deliver? Are there hybrid organisations that need a different analysis? What about, for example, football clubs with a loyal following but owned as businesses?

Even more importantly, you might turn your mind to today's big debate about productivity in the public sector. In my view, this is often conducted at a low level of understanding. You emphasise the importance of measuring in terms of outputs, not inputs. Too many people in Britain try to measure productivity solely in terms of inputs and activity levels - shadowing business measures - such as number of pupils per teacher or admissions to hospital. The harder task is to measure value for money in terms of our goals, their outputs and quality, education and health. Improving health, paradoxically, means fewer admissions to hospital and fewer interventions.

This valuable and timely book offers a simple but convincing model of what drives success in the social sector, providing explanation and interpretation for business and social-sector leaders alike.

Yours ever, Nigel

Good to Great and the Social Sector; Jim Collins; Random House £6.99

To order, visit www.mtmagazine.co.uk

Lord Crisp was jointly CEO of the NHS and permanent secretary of the Department of Health from 2000 to 2006.

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