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© 2002 The Performance Institute
Government is Different
•No Existing “P&L System” for Government
•No Darwinian Environments in Government
•Without a bottom-line and without competitive forces…program structures and approaches stagnate…and problems grow.
•Poor performers get rewarded.
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•Before fundamental change can occur in government, we have to have get a bottom-line and a competitive system. 
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A good starting point for answering these questions is comparison of the forces impacting private versus public agencies.  Your colleagues in the private sector have no choice but to perform well because if they don’t, they are out of a job or worse yet, the whole enterprise becomes a sinking ship.  Private sector actors are motivated by the bottom line, turning a profit, and outsmarting their competitors.  If they don’t zero in on the best strategy, they will be undercut by the competition.  In the private sector, if you don’t budget based on performance, utilize IT for better customer service, improve financial management, focus on human capital planning, or integrate competitive sourcing, a competitor will come along, do a better job, and put you out of business.
Now, how does the public sector compare?  Government managers are not motivated by the bottom line or competition.  They don’t have to innovate to make a profit or stay in business, and they certainly don’t have competitors nipping at their heels.  The Darwinian environment of the private sector is not in effect.  Regardless of last year’s performance, each agency’s budget is increased the following year.  Because after all, the social problems of last year – like hunger and homeless – have gotten worse and require the expenditure of greater resources.  In a sector devoid of competition – where buyers don’t have alternative providers –stagnation is inevitable and innovation is nonexistent.
Good management will always be harder in government than in private sector organizations, but performance measurement does provide the impetus for government agencies to change, innovate, and focus on good management.  The bottom line isn’t profit, but it is good results.