Politicians often say that government should run more like a business. We also hear this same call from corporate boardrooms. Certainly core business principles, such as productivity, a keen eye on the bottom line and customer service, should exist in the public and private sector.
Akron-Canton Airport is a public entity with a publicly appointed board of trustees. The board of trustees, however, requires the airport to run efficiently and to deliver an exceptional customer experience. Not very “government” sounding is it?
But should Akron-Canton or other public agencies run like a business?
Fiscal responsibility is universal
Business leaders are driven first and foremost by bottom-line results that translate into profits for their owners and/or shareholders. Solid financial results are often built upon productivity, customer service and great products. Public agencies, on the other hand, are committed first and foremost to improving the quality of life in our community and region.
As a public organization, the airport is not necessarily required to make a profit. It must, however, operate in a manner that is fiscally responsible. The airport does not receive local tax dollars to fund its operations, so it must survive, grow and thrive on revenue generated by services and amenities. What’s more, CAK is committed to generating an annual surplus that is reinvested in the public infrastructure rather than being distributed as a dividend or as profit-sharing. The CAK’s return on surplus is also reinvested in improving the customer experience.
Much like businesses, exceptional public agencies regularly produce financial statements, have asset records and follow a budget. These important financial tools demonstrate solid management fundamentals, important in the public sector to assure accountability and transparency.
Similarly, public and private organizations should look for new and innovative ways to accomplish their mission by keeping up with industry best practices, leveraging technology to gain productivity and by listening closely to customer preferences.
Long-term planning, community impact are unique
Public organizations like CAK, by their very nature, must differ from business in a few important ways — long-term planning and measuring community impact.
Public buildings and assets must serve their intended purpose for the long haul. CAK’s 2,400-acre campus simply cannot (and shouldn’t) be moved. The recently completed 20-year master plan will serve as the blueprint to improve the CAK customer experience in a sustainable way for many years to come. Businesses are not required to think like this. They can move operations around the globe.
Public agencies often measure their community impact. Our ability to create jobs, payroll and taxes creates stronger communities. In the airport’s case, the impact has grown to more than $500 million annually, a 44 percent increase over a similar study done in 2004.
So, should government agencies act like business? The answer is yes, with key distinctions. High-performing public organizations can and should adopt best business practices like financial accountability, commitment to customer care and high productivity to produce the very best outcomes for the community.