Comparing Business To Government

Editor’s Note: This column, “LBWA” (Leadership By Wandering Around), is based on the premise that, in order to find out what’s going on in the field, a parks and rec leader has to leave his or her desk and “wander around” the area of operations, talk to people, ask questions, and kick around ideas with the individuals in the thick of delivering services to the public. So the author will bring up issues and ask the leaders among the readership to share their knowledge and experiences.

Since the economy took a turn for the worse, I’ve frequently heard people refer to government and say, “If this was a commercial business, it would never survive running this way.”

This philosophy, initially applied to the federal government, has now come down to the local level.

Before, I thought it was a valid perspective--public administrators should be just as prepared to make the same hard personnel and operations decisions as their counterparts in business. But I’m beginning to wonder if that’s truly the case. Perhaps there is a fundamental distinction between business and government that makes leadership in each sector function differently.

Enter The Entrepreneur

Last year, Kim Uhlik, an academic in the recreation and tourism fields and a frequent contributor to PRB, wrote an article about this topic, titled “Enter The Entrepreneur.” He very succinctly laid out the problem: public-revenue shortfalls have necessitated public-recreation professionals to start acting more like business entrepreneurs.

I can feel that pain. Over the past several years, the focus has been on creating revenue streams, including increasing fees for service; in some cases, it meant implementing new fees. It also included using innovative ways to locate revenue in places that weren’t considered previously.

As Uhlik points out, “Ideally (in the good old days), public recreation was ‘by the people, for the people.’ People paid taxes, so they all could partake in services offered. Because taxes were paid upfront, anyone could participate for ‘free.’”

Expenses have increased while revenue decreased, leading public entities to adopt, in Uhlik’s words, “the entrepreneurial tactic of introducing a wide range of fees and down-streaming agency costs to the customer.”

But when transitioning from a pure public-service environment where revenue was a secondary consideration at best, there are many obstacles to overcome, and it can’t be done overnight.

For one thing, there are many attitudes to deal with:

1. The public (i.e., citizen) doesn’t want to be told to pay more for a service, especially one that’s been “free” (for the cost of their taxes).

2. Staff members have to be re-trained and re-focused to think beyond the comfort zone they establish with patrons in the pure service environment.

3. Elected officials have to find the balance between pleasing constituents and making the difficult fiscal decisions that often impact those same constituents.

4. Commercial-business owners often feel--justified or not--that it is unfair for a government entity to offer the same types of services at a lower cost, due to being subsidized by tax funding.

Another growing pain in the transition from the public to a pseudo-business model is that the public-finance and procedural structure, especially at the local level, doesn’t support it smoothly. There are myriad rules and restrictions a government has to consider, and they seem to be getting more and more encumbering. Often a task that seems as if it should be a 10-minute effort can take 10 days or 10 months due to “procedure.”

Sounding Off

So trying to float somewhere between public and commercial is like trying to wear the stripes of a tiger and the spots of a leopard; the animal may be beautiful, but a bit strange-looking. I guess the trick, as with so many things in life, is to find the middle ground.

Apparently, there is a range of opinions among recreation professionals on this subject, based on comments PRB received on its new blog, “The Week-Ender.”

Bryan K. writes, “If … parks were a profitable business, Haliburton would be in the park business.”

Karen E. notes that, just like public schools, the purpose of public recreation “is to provide access to all people, regardless of income, as it’s paid for by everyone, not just users of service. If charges were made to pay for all operational costs, it would be private recreation, which serves those who choose to use and can afford to pay. Public recreation is one of the most effective ways to keep all people healthy, engaged and a part of community.”

T. H., whose operation is organized as a park district, has a different perspective: “It’s refreshing to hear this attitude during the number-crunching days we call ‘budget time!’ We have to run our district like a business because we can’t lose money. It’s not, however, a for-profit organization. We want to make enough money to provide for anyone who walks in the door, and maintain the property and assets that we have.”

I think there is a marked difference between the “citizens” whom public entities serve and the “customers” to whom private commercial business caters.

Private business attempts to sell “customers” something they may or may not want or need at a price they may or may not be able to afford.

Public administrators offer services that “citizens” have told them they want via surveys, sign-ups, word-of-mouth or elections. There may be similarities in how to approach the two categories of users, but there are also some significant differences.

But this is just my opinion. How do you professionals in the field feel about it? Call or e-mail me or PRB, or tap into the “Week-Ender” and share your knowledge.

Randy Gaddo , a retired Marine, is Director of Leisure Services (parks, recreation, library) in Peachtree City, Ga. Contact him at (770) 631-2542 or e-mail