Principle #3: Private-Public Partnership Communication - Strategic Planning
If you stump your toe in developing and implementing your strategic plan you will have an uphill battle throughout the privatization process. The particular public sector involved and the private sector contractors will each be affected. Each will spend valuable time and financial resources correcting the misfired initiative.
Once an outsourcing or privatization effort has been determined to be a winwin effort and the stakeholders that will be affected have been defined, then there must be a strategic plan of how to announce the project and how to address the concerns of all parties.
A leading business consultant once noted, "most companies fail by getting shot in the temple while they were looking to avoid the bullet that would hit them between the eyes". The same is true for privatization efforts. Here is a too often scenario: (1) careful work has been completed that shows outsourcing to be the correct avenue (2) stakeholders have been defined (3) the R.F.P. has been developed (4) every legal concern known to mankind has been addressed in the R.F.P. (5) the R.F.P. is so complete that it must be delivered to prospective bidders by a multi-ton vehicle due to the weight of the paper (6) we then make a "by the way" announcement that we are outsourcing or privatizing. What happens? All the wheels come off the wagon. You are in a fight for your life in a media war, governmental war, public relation war, community war and employee war. What went wrong? Poor communications. There is a need for a strategic communication plan. It must be flexible, ethical, truthful and timely. Any good strategic plan evaluates the resources available to accomplish the plan, clearly defines each resource participation in the plan and has some way of measuring the success. The communication plan must address perception, education and individualization.
Perception
Learn the perception of your project. This is not necessarily reality. Perception is more powerful than reality. Do your homework. Talk to key individuals both inside and outside the four walls of the governmental buildings. What is their perception of the effort you want to initiate? Take off your filter and listen. What you may consider as perception may in actuality be reality. Understand the objections, concerns and avenues you should explore.
There are several significant benefits resulting from these efforts (1) you will learn something (2) you will develop a better plan (3) even though some of those you are seeking input from may not agree with your plan they will at least respect the fact that you sought their input (4) you will learn where the opposition will come from (5) you will learn who is your support base.
Perception that differs from reality will be a constant issue throughout the privatization process. Don't be surprised. Remember, the opposition will have their filters on. Facts will be filtered and diluted in order to support their agenda. How do you win? You will never win all opponents over to your side, but the most effective way of winning a majority is to educate.
Education
Develop a communication piece that both educates and answers questions.
If an outsourcing or privatization effort is justified then the opposition generally occurs due to lack of information or misinformation.
There are many misconceptions about outsourcing or privatization. There is the misconception that the public sector has failed and that is the reason for the outsourcing. We have seen many successfully developed and managed government owned services or properties. There are, however, many government owned services or properties which could be run more effectively and efficiently by the private sector. The success or lack of it in government owned services or properties can be an endless debate, with both sides having their own measuring stick for success. The substantive point comes down to a handful of issues which should be
considered and should be communicated as to why this change in the government's role.
One consideration should be whether or not the government should be in "that" particular business? Many government owned services or businesses were created many years ago to initiate economic development for an area. Others were considered government "stuff' in a particular period of time. With the changing of society and the broadening of private business categories, government must constantly be reevaluating its role. In many cases government owned businesses compete directly with private for-profit industries. We have seen this particularly in the recreation and tourism business. Public entities have built hotels, conference centers, water parks, golf courses and fee based recreation, entertainment and amusement facilities. Many of these were built to stimulate private investments in an area, but in many cases the government ownership has now stymied future growth from private investors who do not want to compete against the government resources. Therefore, to encourage private investment it may be necessary to privatize.
Another reason has to do with the effectiveness and the efficiency that a private operator can bring. This private sector's advantage may be based upon technology, resources, scope of operations, or capital and manpower resources. In many cases a private company can supply the same or better services to the general public or government agency at a more effective cost.
A third reason could be the capital outlay required to maintain, improve or expand a service or facility. Again, looking at the tourism/recreation industry, capital infusion is a constant requirement in order to remain competitive. Many privatization initiatives of recreation properties have resulted in the same or improved net revenue streams to the governmental body without the annual capital outlay. The privatized facility generally expands, adds greater services and meets more of the demands of the public. The government agency wins, the public wins and the operator wins.
An argument that is always raised by opponents of privatization in the area of privatizing recreation properties is the idea that prices will be raised by the private operator to a point that the general public cannot afford to use the property. This argument simply does not stand the test of reality and history. The new private operation must compete with all other like private properties. The "market" will dictate the price/value relationship. We have rarely found that prices go up without corresponding guest value going up.
There is another misconception that needs to be addressed; "all employees" will lose their jobs. It is critical to clearly explain what will happen with current employees. It is rare that 100% of the employees are left without jobs. We have found that the vast majority of the employees are retained. The pay scale and benefit package is as good or better than their previous government package. They usually have more opportunities for advancement and generally have better training options.
The process of education and answering questions will cover not only these areas mentioned but should also cover other critical issues such as legality. Such issues as existing contracts and agreements must be reviewed. Current bonding or government funding agreements must be understood and a strategy should be in place to address these financial obligations. Union contracts must be resolved. Many services and properties were created by a legislative act. What are the legal requirements to privatize? Many of the privatization efforts involve properties that were donated to the government entity and carry a set of covenants. How will these be resolved?
The list of legal concerns can be long and time consuming, but many outsourcing efforts have been killed because of the last minute legal discoveries. It takes a dedicated group to exhaust and document the legal maze.
There have been last minute delays or termination of privatization efforts because environmental issues were not addressed properly. This is another case of educating the appropriate authority as to what will take place in the privatization issue, listen to their concerns and create a strategy to address those concerns.
There are many other issues that need to be addressed and our intent is not intended to be exhaustive but rather to give examples. No matter what the category, the education process must be factual, sensitive to the needs and concerns of all stakeholders, justifiable, rational and must clearly define the big picture: (1) where we have been (2) where are we now (3) where do we need to be in the future (4) what are the advantages of the outsourcing? This four-step picture must be conveyed to each of the stakeholders.
Disclaimer All Rights Reserved © 2000