This is going to go against the norm for the past few decades, but here goes: local municipalities [cities or counties] are not, and never have been, a business. In fact, no goverment should run as a busness. While decision makers need data and evidence concerning policies, programs and activities to achieve intended results, at their core, governmental operations are fundamentally differently from business. One core difference, and there are others, is found in the reality, governments focus on public service and the common good and not profit. Generally speaking here are three top essential differences between a business and a local municipality:
- Missions and Objective
- Accountability
- Stakeholder Relationship
The Essential Differences Between Government and Business
Mission and Objectives:
Government’s Mission: The primary mission and objective of a local municipality is to serve the public and provide for the common good. They deliver essential services, such as, education, healthcare, infrastructure, etc. The mission and objective are not profit-driven, it should focus on meeting the needs of all citizens, and at best, breaking even.
Business’s Mission: The primary mission and objective of a business is to generate profit for their shareholders. Their success is measured in earnings, financial terms, profitability and not public welfare. They may talk about their customers as “community” but they do not even come close.
It drives me crazy when any government agency sees citizens as ‘customers.” I have been involved at all levels government, city, county, state and federal, and my eyes glaze over when I hear anyone working in government talking about “customers.”
Accountability:
Public Accountability: Local government officials are accountable to the public [the citizen]. Local governments need to navigate a complex system of checks and balances. Decisions made by local governments are subject to scrutiny of the citizens they serve, oversight bodies [Board and Cpuncils], and the media.
Private Accountability: Business, on the other hand, is primarily answerable to their shareholders. They make decisions that prioritize profit over broader societal impacts. This leads to a very different approach to risk and accountability.
Think of it this way, local municipalities are answerable to ALL citizens living in their jurisdiction. They should focus on how to me the lives of all citizens comfortable and meaningful. Business is focused on making a profit, and focus on only those who can afford to purchase what they are selling.
Stakeholder Relationships:
Citizens vs. Customers: Citizens are not customers; they can be seen as “stakeholders” [not shareholders] with rights and expectations from their governments they support. When we treat citizens as “customers” we undermine the democratic principles. We overserve those who pay more in taxes and underserve those who pay less. We replace equality, with the mindset of “less than,” choosing to serve a specific population.
Business Relationships: Businesses can choose to serve specific market segments. They can abandon unprofitable lines of service because of losing money. They are only required to serve their shareholders and make money.
Local Municipalities have a deeper responsibility. They provide services to all citizens, regardless of profitability, or status in the community. As local municipal leaders we need to work hard to leave behind the verbiage of business when we speak of citizens and community. We need to focus on lifting those who need lifting and serve all equally.
This is not to say we do not use data, analytics, capacity building, or evidence based policy development, we just need to remember we serve the community, the citizens, and do what is right by them. We need to portray the reality that we are not a business and guide decision-making on the community we serve.
About the Author
