Managing PSEs: A challenging task

Henry Kissinger has once said management is doing hundred things a little better. And the science of management says to improve any organization or institution, we have to focus on seven main areas- called Seven S- Super ordinate goals (shared values,

aspirations, broad holistic vision), Structure, Strategy (market, customers, competition), Systems (rules, regulations, MIS, procedures, annual reports, budgeting etc), Skills, Style (management style, culture, values, habits, mentality etc), and Staff (appraisals, motivation, attitude etc.). It will be a daunting task to analyze each S in each of the 36 Public Sector Entities (PSEs) of Nepal. Suffice it to say that those 36 PSEs need immediate attention to make them more efficient, vibrant and proactive.

One of the biggest problem faced by all PSEs is a “psychological inferiority complex” due to the fact that vast majority of general public including intellectuals, journalists, politicians and top bureaucrats have this mistaken notion of PSEs in our country only are inefficient and unproductive compared to private sector. Actually, all over the world including developed world, public sector, by its’ inherent nature, will always differ distinctly from private sector especially in accountability, responsibility, staff morale, working environment and above all in the speed of decision makings.

Second problem faced by PSE chiefs is the unsolicited advice and lecture regarding the need for “management improvement”.

But nobody is clear enough on what areas, with what management tools and techniques reform should be carried out. Although it may sound too exaggerated, the advice on management improvement is something like ordering somebody to swim with hands tied. Any management expert can easily prove that there are only limited areas in PSEs, where one can try for improvements. This exactly is

the reason why foreign advisors and consultants including donor agencies are trying to convince successive governments for almost past 20 years to opt for strategic investor concept or full scale privatization.

But each government is vacillating on this issue for the past 20 years.

Due to inherent nature, all PSEs will be rigid in structure and systems, that is, organizational structure, procedures, rules, regulations, budgets, reports and reporting etc will always tend to be in line with government thinking and approach. Glowing example is government’s recent initiation of interaction on the possibility of going back to centralized recruitment of staff in all PSEs. Moreover, changes in structure and systems can only bring marginal improvements in any organization. Hence, it will be futile exercise to focus more on those things. But, ironically lot of management experts and managers in PSEs tend to give more emphasis on structure and systems. In fact, more important

is the software elements of seven S, especially staff, style, skills, strategy and shared values.

Due to very nature of PSEs, we have to accept the fact that unlike in private sector one cannot recruit executives and senior managers from the open market and one cannot sack inefficient incumbent staff. This means one has to aim for higher efficiency and outputs from same group

of people who have been working in the organization for years and decades. Only solution to this is that

the top management should give utmost importance to skill enhancement, training, talent development, work-culture change, habits, values and norms, mentality, attitude, motivation and above all bringing up a synergy of combined corporate strength.

All of these elements

deal with behavior of people, building self-confidence and human psychology. And to bring this change in behavior and mentality of entire workforce, leadership quality of top management and above all that of CEO matters most. It will be worthwhile to remember an old saying- an army of sheep led by a lion would defeat an army of lions led by a sheep.

The modern management science says single most important task of a CEO is to create human energies and human vision. The second most important requirement for good leadership is to establish a superordinate goal of the organization, think through the mission and vision, define and establish that vision clearly, precisely, visibly and in simple language to the entire staff.

One other factor which is adversely affecting the growth of PSEs is the degree of risk-taking by the top management. Common sense dictates that that more one becomes ambitious more risk one has to take. There are no short-cuts for ambitious and

fast performance. No risk no gain is the rule of the game. Unfortunately, due to variousreasons, it seems government machinery is somehow giving the impression that risk-taking is not a noble act. This resulted in very slow pace of development activities in the past.

Unless the government makes a drastic policy change to prompt CEOs of 36 PSEs to be more ambitious and to take more risks, the pace of development will not improve.