Steve Jobs is perhaps the best recent example of entrepreneurial skill and inventive success tempered and challenged by failure. The Apple “Lisa” computer was unsuccessful, but it set the stage for Macintosh. Jobs was then forced out of the company he built and started a new company, NeXT. While NeXT flopped overall, its platform became the basis for Mac OS X, and in 1996 Jobs joined Apple, effectively saving it from bankruptcy and driving it to become one of the most innovative companies in the world with the launch of the iPod, iPhone and iPad.
But we should ask ourselves the question: Would Jobs or others who failed at their initial goals have been given the chance to succeed and be innovative if that initial failure had occurred in government?
Innovation is an old term that has new prominence. In the private sector, innovation often revolves around emerging digital technologies. In the public sector, innovation is typically linked to achieving greater efficiencies in the use of public revenues, thereby better investing tax payer money. Most large cities even have individuals and sometimes entire staffs devoted to innovation. However, one of the biggest differences in the private and public sectors when it comes to innovation is this: While failure followed by a surprising climb to success is the subject of legend in private enterprise, government leaders are typically not given such latitude.
One important reason is that while the loss of private money will negatively impact a small number of investors, every tax payer considers themselves investors when it comes to public funds, and will typically react negatively to any known waste or loss of their contributions. While people might forgive and even forget failure in the private sector, voters are not likely to easily and quickly forgive public officials who must bear responsibility for loss or failure – especially not when the public currently has a near-record-low trust in government and constituents lack faith that government leaders are acting in their best interests.
There’s also the fact that when the private sector pursues an exciting innovation and it becomes apparent things aren’t working out as planned, that company has latitude to shift, change and refocus, or what’s commonly known as pivot. But government leaders can’t pivot, at least not without attracting a significant amount of bad PR. It is one thing to announce that you plan to produce a better widget, and then change the product or business plan when things go awry. In the public sector, government leaders can’t build a plan to do one thing and then do something else entirely.
However, despite all of this, in her 2013 book, “The Entrepreneurial State – Debunking Public vs. Private Sector Myths,” Mariana Mazzucato points out that the public sector is in fact more innovative than the private sector. “Not only has the government funded the riskiest research, whether applied or basic, but it has indeed been the course of the most radical, path-breaking types of innovation,” Mazzucato writes.
The point is this: Government leaders must be even more fearless than their private sector counterparts. They must dream big and then act boldly with the clear knowledge and understanding that failure is not without repercussions. In addition to public funds, public projects also require the investment of considerable political capital. Public servants stake their livelihoods on outcomes, and must be prepared to live with the consequences if the outcome is less than expected.
While in our capitalistic society it’s always easy to jump onto the private sector bandwagon, let's give the public sector innovators the respect they deserve. They are heroes too.
