Differences in Running Public Sector vs Private Sector Projects

Both the public sector and private sector take on and successfully deliver large projects. Both sectors have equally smart people, but history is littered with individuals who were successful in one sector moving to the other and failing miserably. The primary reason for this is their failure to appreciate the enormous cultural differences between both sectors, and moderate behaviours accordingly.

The culture of the public sector is steeped in considerations towards regulations and compliance and a high degree of governance oversight.  This has resulted over the decades in the evolution of processes and procedures that are seen as excessively bureaucratic by those more accustomed to working in the private sector.  On the other hand, business culture in the private sector culture is typically characterized by a focus on efficiency, speed, and profitability.  

While there are certainly overlaps between the two cultures, there are also significant differences that can make it challenging for individuals to move from one sector to the other.  Let’s explore six ways in which Project Managers need to understand how the two cultures are at variance.  Note that there are bureaucratic private sector firms and entrepreneurial public sector organizations, so this analysis is taking a broad-brush approach.

Risk Tolerance
One of the biggest differences between public and private sector culture is the level of risk tolerance.  In the public sector, there is a strong emphasis on minimizing risk, whereas, in the private sector, risk-taking is often seen as a necessary part of doing business, and in more entrepreneurial organizations is actively encouraged.  This can make it challenging for individuals who are used to operating in a risk-averse environment to adapt to a faster-paced, higher-risk environment that may exist in the private sector.

Decision Making
Another significant difference is the way in which decision-making is handled.  In the public sector, decisions are often sought via a consensus-based process, whereas in the private sector, decisions are often made by a small group of individuals at the top of the organization. This can make it difficult for individuals who are used to working in a consensus-based environment to adapt to a more hierarchical structure of the private sector.

Transparency
A big difference in culture is the level of transparency and accountability.  In the public sector, there is always an awareness that there is a high degree of transparency and accountability.  Freedom of Information legislation can come in from a journalist or member of the public at any point, meaning that individuals working in the Public Sector are always mindful of the level of detail they are committing to public records.  In the private sector, organizations can be less concerned about transparency with external stakeholders. This can make it challenging for individuals who are used to working in a highly transparent environment to adapt to a more guarded culture.

Resource Allocation
Additionally, the way in which resources are prioritised and allocated also differs between the two sectors. In the public sector, the goal is to prioritise resources based on need, whereas, in the private sector, resources are often allocated based on their profitability or return on investment.  Need-based resource allocation is the process of distributing resources based on the different levels of need within the population and it seeks to ensure that resources are distributed in a way that is fair and equitable. This approach is often used in social welfare programs and humanitarian relief efforts. It can be difficult for individuals who are used to working in a need-based environment to adapt to the profit-based culture of the private sector.

Performance Measurement
Finally, the way in which performance is measured also differs between the two sectors. In the public sector, performance is often measured in terms of service delivery, whereas in the private sector, performance is often measured in terms of financial performance.  This can make it challenging for individuals who are used to working in a financial-based environment to adapt to the service-based culture of the public sector.

Procurement
In addition to understanding the soft elements of culture, Project Managers should also be aware of the specific regulations and policies that apply in the world of Procurement in the new sector.   Public Procurement policies are strictly defined and operate on the ethos that it is the taxpayers’ money being spent.  A Project Manager moving from the private to the public sector will need to familiarize themselves with procurement laws and regulations, while conversely a Project Manager moving in the other direction will need to understand the tax laws and regulations that apply.

As a Project Manager, it is important to keep in mind these six differences when transitioning from the public sector to the private sector, or vice versa.  It’s crucial to understand that the approach to managing projects and leading teams may be different and that it’s not a good idea to force a square peg into a round hole.  Aspira has fifteen years of experience working across industries, in both the Public Service and the private sector, and can provide valuable insights for Project Managers in navigating these cultural differences.

The cultures of the public sector and private sector can be vastly different, and Project Managers need to moderate their behaviours when moving from one to the other. Understanding the culture, dynamics, values, and regulations of the new sector is crucial for the success of the project and the Project Manager. Project Managers should take the time to understand the new sector, look for guidance and support from experts like Aspira and be open to learning new ways of working.

Finally – it’s important to emphasise that while there may be challenges when transitioning from one sector to the other, there are also many opportunities. The skills and experience gained from one sector can be transferred and applied to the other, leading to a more well-rounded and versatile Project Manager.  Additionally, the opportunity to work in different sectors can provide a unique perspective and a broader understanding of the industry.  Embracing differences, and being open to learning can lead to a successful transition and a fulfilling career.  Overall, the ability to navigate and understand the cultural differences between the public and private sectors can be a valuable asset for any Project Manager, leading to a more successful and rewarding career.