• Opinion
  • January 31, 2019
  • 10 minutes
  • 1

The original blitzscaler? What the public sector can teach high-growth startups

Opinion: Companies chasing rapid growth can find surprising public sector parallels

blitzscaling

This piece was written by David Eaves, Lecturer in Public Policy at the Harvard Kennedy School, and Kevin Frazier, a MPP/JD candidate at the Harvard Kennedy School and UC Berkeley School of Law. For more like this, see our government innovation newsfeed.


Reid Hoffman and Chris Yeh recently published Blitzscaling, a book that uses private sector examples from Silicon Valley companies to provide advice on how to quickly scale organisations.

The authors describe blitzscaling as “a strategy and set of techniques for driving and managing extremely rapid growth that prioritise speed over efficiency in an environment of uncertainty.”

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In short, it’s the deliberate prioritisation of impact over efficiency or quality. This includes, for example, accepting less refined HR practices, customer service and product testing in order to achieve “lightning” growth. In the private sector, these strategies, despite their shortcomings, are necessary in markets where there is only room for one or two large providers and where the “first-scaler” will gain a key competitive advantage.

Hoffman and Yeh didn’t include governments among their examples of blitzscalers. It’s hard to blame them. The typical stereotype paints government as inefficient and behind the times.

However, a closer look at governments shows that there are many parallels between private and public sector blitzscalers. What follows is a review of how governments approach blitzscaling and how their approach may inform private sector attempts to manage “rapid growth.”

The public sector and blitzscaling

When pressed by disaster, law, or war, governments have shown their ability to blitzscale. Consider how they respond to natural disasters. Governments address human limitations on operational scalability by outsourcing and delegating. These actions reflect a core blitzscaling priority — deprioritising optimisation in the name of moving faster.

For instance, in response to Hurricane Matthew, USAID provided funding and logistics to the World Food Program to deliver 19,000 metrics tons of food to almost 1 million people and the Federal Emergency Management Agency dispersed more than $13.1 million in grants to local governments and nonprofits to perform other critical recovery operations.

And governments accepts the tradeoffs inherent in blitzscaling — focusing on rapid impact over efficiency or quality inevitably creates some suboptimal outcomes.

Take the serial rebuilding of Princeville, North Carolina. In this small town, FEMA funds have rebuilt the school twice in the span of two decades. On both occasions, the school was “fixed”, but not in a way that readied it for the next big storm.

This is exactly the sort of behaviour Hoffman and Yeh would expect from an organisation facing high enough stakes — in pursuit of rebuilding thousands of buildings quickly, one sacrifices critical details, such as should this building be rebuilt.

Yet, according to the authors, mistakes and inefficiencies like these are often necessary sacrifices for immediate action. Several governments have navigated this trade-off. Case in point, to outfight and outproduce enemies in World War II, President Franklin D. Roosevelt banned the civilian production of automobiles. Was this the most efficient way to use or allocate capital? Absolutely not. But it enabled the United States government to quickly scale its war effort. Roosevelt presidency is filled with blitzscaling examples.

Hiring to scale in the public sector

Hoffman and Yeh stress the importance of generalists over specialists when scaling quickly. Governments have long absorbed this lesson as their ranks are filled with MPPs, PPEs, and MPAs, all generalist degrees.

Blitzscalers should look at the common ingredients in these degrees to help them ascertain what makes for effective generalists. These degrees tend to focus on ethics, negotiations, statistical analysis and economic regression. Are they specialists in any of these categories? Far from it. But can you throw them into a variety of roles and anticipate that most will thrive in a range of scenarios? Definitely.

The authors’ assertion that aggressively scaling startups should hire generalists reflects something governments have long understood

The authors’ assertion that aggressively scaling startups should hire generalists reflects something governments have long understood. There will always be a need for specialists in government, but if you want to solve and then scale answers to new problems than specialists must be complemented with generalists. It follows that ensuring a pipeline of generalist talent can support both private and public sector goals.

How governments ethically blitzscale

Whereas private sector blitzscalers think about how to mitigate their exposure to regulation, governments orient their blitzscaling around how to efficiently comply with regulation. As an illustration, Uber and other TNCs scaled quickly, in part, by defining themselves in a way that freed them from ADA compliance; that’s a strategy strictly outside the realm of possibility for public sector actors and for good reason.

Anti-discrimination laws, transparency standards, procurement requirements and many other regulations may appear to inhibit government efforts to blitzscale. However, these sorts of “red tape” actually serve as useful guideposts that keep employees aligned on shared priorities. The resulting shared sense of purpose, combined with clear legal constraints, nudge public sector blitzscalers to ask ethical questions even when pushed to move quickly.

By integrating these questions into each step of scaling, governments may opt for solutions with less moral and legal risk. Both private and public sector players can do better here due to the high costs of getting it wrong in both the public (see corruption after Hurricane Katrina) and private sectors (see Theranos) when these questions go unasked or unanswered.

The leaders behind public sector blitzscaling

Blitzscaling requires a special mix of leadership profiles, what the authors refer to as pirates and admirals. Here the public and private sector have complimentary skills.

Pirates — the authors’ term for leaders of agile, immature organisations — prioritise flexibility, decisiveness and action. They avoid layered decision-making and regulatory red tape. Yet, as their organisation scales pirates need to become admirals, leaders that create systems and maintain structures that enable scale while relying on captains to do the rest.

Startups are fantastic at attracting pirates. Pirates jump on opportunities to work without red tape and skip level approval. In contrast, government tends to task admirals with all new projects, even when pirates are really needed. If learning and challenging assumptions is required, governments need to give a pirate the freedom to experiment and set new rules.

The private sector should actively study what’s helped and hindered governments pursuing rapid impact over perfect efficiency

However, startups are not always great at cultivating admirals (see Uber). Governments, on the other hand, tend to be particularly adept at cultivating admirals. The internally focused career path of public servants fosters admirals with two key blitzscaling traits — institutional knowledge and a strong network. In addition, long career paths for public servants encourage governments to invest in the leadership capacity of admirals through executive education programs or other training. These are structural advantages that startsups will have a hard time replicating.

The original blitzscaler

Popular perception paints the public sector as slow, hesitant, and inefficient. So it’s understandable if the authors thought the public sector wouldn’t have much to offer private sector blitzscalers.

Yet, Hoffman and Yeh defined a process that governments have used to win wars, implement legislation and respond to disasters. The authors and the private sector should actively study what’s helped and hindered governments pursuing rapid impact over perfect efficiency. The manifold lessons they pick up may just be critical to blitzscaling their next big idea. — David Eaves & Kevin Frazier

(Picture credit: Flickr/V)

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