Public vs. Private Failure

There is a direct correlation between an organization's willingness to take risks and its ability to innovate. So imagine my surprise when I asked Congressman Jim Moran (D-VA) if government agencies should "fail fast, fail forward" to come up with the big innovations necessary to tackle big problems and he said, "No."

Earlier this month, at the Catalyzing Growth in Emerging Markets Conference, in addition to the Congressman, I interviewed a number of leading thinkers on public private partnerships in the developing world including Intel's Wendy Hawkins, Dow Chemical's Bo Miller, PSI's Karl Hofmann, and JP Morgan Chase's Bruce McNamer. In contrast to the Congressman they all felt that ventures should take intelligent risks in order to quickly learn, adapt, and scale.

People in the private sector know from experience that, in the words of Intel's Wendy Hawkins, "...when you're on the bleeding edge the only way you can learn is from your mistakes." Civil sector leaders are more circumspect. Some, like PSI's Karl Hoffman live on the bleeding edge themselves. Karl's work creating markets for affordable condoms for people in the developing world required intelligent risk taking. At the same time, he faces a different level of donor and public scrutiny than companies engaged in commercial research and development.

In the public sector there's greater anxiety. Admitting failure brings tons of public, media, and Congressional criticism. Congressman Moran followed his definitive, "No," with a nuanced and thoughtful response. "The private sector is made to quickly reconstitute itself," he said, to rapidly set things up and tear them down, "Government isn't set up that way." In fact, the more I thought about it the more this rang true. Our Constitution, with its checks and balances and separation of powers protects us from tyranny by deliberately slowing things down. It takes a lot to set the wheels of government in motion and to stop them once they get going.

The real trick, according to the Congressman, "is to figure out how to work with companies to innovate and then with government to execute. You need failure in innovation, not in execution." Easier said than done, but very true nonetheless. The real challenge for public-private-civil collaboration is to enable the private/civil partners to take on risk and innovate and then bring in the government at the right moment to execute and scale.

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