Comparing Business To Government

By Arnie Biondo

In the May 2010 issue of PRB, columnist Randy Gaddo questioned whether business should be compared to government.

For decades many “old timers” have heard community members, politicians, and business men and women say, “Government should be run like a business.”

Well, they are right--and wrong.

The word “business” implies an organization that exists solely for the purpose of earning a profit.

So, in this sense, running a government or public service--such as a park and recreation agency--“like a business” is wrong. Governmental agencies should never, ever make a profit.

However, our well-meaning friends are completely correct when the comment is altered to say, “Use more business-like practices.” This is exceptionally true in regard to public parks and recreation.

What makes these agencies different from all other government or public services (save a few) is that the services are the only retail governmental services. Where most people live, there is only one option for water, police protection, roads, fire protection, etc.

But there are countless options for recreation and choices for spending leisure time.

Even areas where some consider the agency to be the “sole source” are not.

Not that long ago, a seminar participant said, “When it comes to swimming, we are the only game in town.”

Maybe, but people don’t have to swim in the town in which they live. For example, within 15 minutes of my house in the Chicago suburbs, there are at least four other public pools, and at least two private pools. Clearly, residents don’t have to swim at the hometown pool!

The same can be said for golf, dance, gymnastics, etc.

Because we want residents to spend their leisure time and money “at home,” public park and recreation folks should employ many business practices.

This is significantly different than “running like a business.”

Hence, the question should be, “What business practices and strategies should we (public parks and recreation) employ? What can we borrow and adapt from business to successfully and satisfactorily meet the leisure needs of residents?”

The May article offers a statement from Kim Uhlik: “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 up front, anyone could participate for ‘free.’”

This may have been the case in some places, cities (mostly large), where recreation was seen as part of a collection of welfare-like services. However, because public parks and recreation services are retail in nature, people want to choose their activities, and are willing to pay accordingly.

Yes, people are willing to pay for some of the recreation opportunities and park amenities with their taxes. They do not care to have their taxes create a situation where all recreation is “free.”

There are two reasons for this. First, they think they are paying enough in taxes.

Second, I believe people realize that if recreation services are confined to what can be funded through taxes, we will return to the good old days and realize they were not so good.

In the late 1950s and early 1960s, the free recreation options were limited: summer playground at school sites; Saturday afternoon “recreation” at some schools; a basic public swimming pool; and an ice rink in the winter, when it was cold enough to make ice. That’s about all that local park and recreation agencies could do with taxes.

In 2011, there are few, pure public-service environments where revenue is a secondary consideration.

As evidence, NRPA/North Carolina State University Revenue School has been teaching revenue generation and revenue enhancement since 1975. Professionals from all types of agencies around the country and Canada have been attending by the hundreds every year for some 35 years.

Even large cities like Indianapolis operate or own revenue-generating facilities like golf courses, marinas, stadiums, ice rinks, etc.

Over the years, I have worked for four park districts--two cities and two private companies--in various areas of parks and recreation. The reason Illinois park districts are so successful in delivering high-quality services to their constituents is they are not bound by the typical, limiting bureaucracy found in most cities and villages.

These localities are exceptional vehicles for providing police, fire, utilities, and roads ... all monopolistic-type services. But when it comes to parks and recreation, most villages and cities have trouble creating the flexibility and innovative atmosphere to allow for a business-like approach.

How does a public park and recreation agency successfully employ business practices and strategies? The answers probably number in the dozens, but let’s consider some basics:

• Deliver deliberate, sincere, and never-ending customer-service orientation. Realize--as a business does--that people have options, and if they are not treated well, they will go elsewhere.

• Conduct market research. Programs, opportunities, features, etc., have to be designed and offered the way people want them, when they want them, and at a price they are willing to pay. Put time and money into finding out.

• Understand the link between revenue and expenses. If the money's not coming in, then the expenses have to be trimmed.

• Take calculated risks.

• Plan your strategy and re-plan every 3 years.

• Eliminate deadwood. Public-service agencies are notorious for not terminating poor employees. There seems to be a notion that a public job becomes a right once it is landed. If an employee does not produce, or even if the revenue in an area is dropping, the person or the job should go away.

• Pay attention to the product/service life cycle, assessing and adjusting. Recreation interests are too dynamic to assume they'll always be popular. Change has to be constant.

• Treat money (allocations) as if it were your own. Don't be penny-wise and pound foolish, but make sure you spend in accordance with what residents expect in the way of quantity and quality. Don't spend merely because it was allocated.

• Continuously evaluate procedures and processes for better cost-effectiveness, and more importantly, for user-friendliness!

• Create enterprise funds and accounting systems. Too many park and recreation (and other public service) agencies are stifled and forced into systems that create waste. A properly administered and audited enterprise fund can allow for much less costly parks and recreation while establishing the link between revenue and expenses.

When--or perhaps because--public park and recreation agencies follow the bureaucratic examples of other monopolistic services, their budgets are cut first. When agencies adopt, modify, and apply business practices, their value increases and their perceived cost decreases.

When individuals and communities see that their recreation is high quality and high value, and delivered in a business-like manner, they won’t tolerate service cutbacks.

It’s going to take some “wake-up calls” and “whacks upside some heads,” but agencies must see their service as retail government services, and organize and conduct business accordingly.

Arnie Biondo is the Executive Director of the gold medal-winning Carol Stream Park District in Carol Stream, Ill. He has served in that post for 16 years. Prior experience has been with the city of Indianapolis, NESMA Recreation Services, Co. of Saudi Arabia; the City of Kettering, Ohio; and Wheeling, Wheaton, and Oak Brook Terrace (Illinois) Park Districts. He holds a Bachelor of Science Degree in Recreation and Park Management from the University of Oregon, and a Masters of Arts Degree in Service Marketing and Management from DePaul University.