Can the Civil Service make interchange with business happen this time?

22 June 2012

One of the commitments in the civil service reform plan is for more interchange with the private sector. But that promise has been made in the past and failed to make real change. Will it be different this time?

“It never really works, does it? Whatever they say, leaving is always bad for your career”.

The wise words of former cabinet secretary Lord Butler to me at a party after I had returned to the civil service after a stint of six years working at BP – which I had naively thought might help rather than hinder my upward trajectory, as the mantras of the time from the civil service leadership suggested. He was right six or seven years ago – and our analysis of permanent secretary experience showed under 3% of their working lives had been spend in the private sector. Will Sir Jeremy and Sir Bob will prove him wrong this time?

There are two aspects to more successful interchange – one is whether people who start off in the Civil Service can leave and come back enhanced from the process; the other is whether people who join the Civil Service after successful private sector careers can transfer their success into the public sector.

On the first count, there is a great naiveté on the plausibility of moving between civil service and business careers. Unless you want to move into government or regulatory affairs, the value of someone from a predominantly public sector background to business is relatively limited. The time that your business contemporaries have spent learning the details of the business they are in, understanding the market and establishing a track record is time you have spent doing very different things. You are much less qualified – and therefore much higher risk. In those circumstances you have to be truly exceptional (possibly like Jeremy himself who spent time in a senior position at Morgan Stanley) to be allowed into a mainstream business position of anything like equivalent seniority. So you can understand more about how the business world operates and sees things – but you are unlikely to pick up what most ministers would see as “front line business experience”.

On the second count, the track record of bringing people from business into the Civil Service in the UK isn’t great – as Lord O’Donnell pointed out last week. Here it does look like we have something to learn from the Australians who seem to have a more thought out approach to helping outside people succeed (rather than taking satisfaction in the fact we don’t). One potential route in for business people is through running some of the big, delivery focused, arm’s-length bodies – more task-orientated and more businesslike roles. But while a lot of the chairs of arm’s-length bodies are drawn from business, we found chief executives of the biggest non-departmental public bodies had only spent 11% of their careers in the private sector.

So is there an answer? One must be to give civil servants more transferable skills that will enable them to move between sectors – in the way consultants manage to do now. Second is to experiment with different forms of secondment and attachment – maybe at more junior levels where skills and knowledge gaps are less exposed. Third is to understand why we have such a poor track record of bringing people in from the outside – and see what we can learn from where it has worked. And fourth, and perhaps the biggest cultural change, is for the Civil Service to be interested in what people who go and come back have to say about their experience – rather that treat it as an unfortunate and career-limiting aberration. When I returned to the Civil Service only one former colleague expressed any interest in what I had learned. He is now a permanent secretary.

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Comments (7)

  1. Tim Lloyd on 23 June 2012 at 8:55 am

    As someone who has moved from the private sector to the public sector, I find the idea of more interchange very exciting. I would challenge the assumption that public sector people bring limited value to businesses. In my experience, the public sector is often more innovative in the ways in which it communicates with its customers, and in addition, business often lacks the rigour of the public sector. A public sector employee could bring a lot to help the structure and processes of a business, particularly SMEs

  2. Andrew Cahn on 3 July 2012 at 4:13 pm

    I agree with Jill’s analysis. The British public service hamstrings itself by being so wary of interchange and of using skills/experience gained outside the public sector. Perhaps it stems from the public/private ideological divide in politics; but more I think from an inward-looking culture in the civil service and a determination to see conflicts of interest.

    I was much encouraged at the IFG event by Jeremy and Bob’s evident wish to change this and to encourage more interchange. They also showed an acute analysis of the obstacles. So I doubt if the problem is now at the top of the civil service.

    I would like to see praise for people who spend time away from more lucrative private sector careers doing public duty. The revolving door is a good thing and needs to be seen as a strength of the economy not a danger to it. I hope to see a recognition that both the public and private sectors can learn from best practice in the other and that exchanging personnel is the best way to spread good practice. And would it not be good if it was thought a good thing for the country that civil servants who retire at 60 wish to continue to contribute to the economy and to society by continuing to work instead of the current presumption that it must somehow be improper.

    There needs to be a positive and proactive effort to encourage interchange, As long as Robin Butler’s dictum holds true, and it certainly did a few years ago, we will struggle to achieve that.

  3. Daniel Harrison on 9 July 2012 at 11:01 am

    Some interesting points Jill, particularly for someone like me who is considering this at the moment. Having joined the civil service 7 years ago after a varied background in the public sector, I am very interested in spending some time in the private sector – but would it be good for my career? A question I still don’t really know the answer to and little encouragement from people I speak to in the civil service. I am currently in what you could call middle management, the options to make this switch seem fairly limited at the minute, though the market is tight for everybody, but in selling my transferable skills to business some of your analysis rings true. I do think there are a lot of transferable skills, but without the track record of applying them in the business environment with an element of proof, selling that message is hard. If government does value the transfer of private sector knowledge in government, then making it easier to move between sectors could bring a greater appreciation of the issues both face and create a more diverse workforce.

  4. David Laughrin on 9 July 2012 at 11:50 am

    It is good that the value of interchange is again being promoted, and also that the potential hurdles to be overcome are also being recognised. As one who grappled with this over twenty years ago, I have been heartened by the continuing success of the Whitehall and Industry Group in promoting both short term placements and longer term non-executive appointments across sectors. There is a lot to praise and to learn from its work.

    However, the natural obstacles to interchange should not be under-rated. At a time of declining career opportunities those with ambition in any sector do not want to be out of sight, and may not want to take the risk of not being able to demonstrate visible success quickly in a potentially alien sphere. The matching process is also crucial – the skills, aspirations and personal qualities of the individual need to be carefully matched with requirements of the host organisation. That is where the skills of a good honest broker can add value.

    Andrew Cahn’s own experience shows that some moves between sectors can work for both the individual and the organisations they join, and we certainly need to highlight these positive examples and not settle for the downbeat view. I suspect that Robin Butler meant “It is harder than people think” rather than to be totally negative. In that he is right but the answer is to go for realistic not outlandish targets and put the effort in using experience of what already works.

  5. Jonathan Flowers on 21 August 2012 at 3:44 pm

    I have personally made the transition between the private and public sectors, twice, and professionally have helped others to make that transition.

    Overall my view is that it is hugely beneficial provided specific and conscious effort is made to de-risk the transition. There are many risks – let me describe one of them:

    I once worked for an organisation which brought bright graduates in to sophisticated development-streamed careers and regularly moved them around to prepare them for the top job, on an assumption that the future leadership would come from within. That wasn’t the civil service, as it happens, it was the NatWest Bank of the late 80s/early 90s. When NatWest brought people in at senior levels from outside, they didn’t work out very well, I suspect for similar reasons that private sector implants into Central Government report difficulty. In NatWest a huge amount of implicit effort went into inculcating very powerful cross-organisation relationships and networks amongst those destined for the top. A lot was achieved through those networks, and one would do a favour for someone now in anticipation that one might want a favour back at some point in the next 4-5 years! It is exceptionally difficult for someone who is seen as only likely to be around for 1-2 years to break into those networks; they simply are not a part of the informal value exchange of the organisation. They need parallel networks, or opportunities to exchange value early on, or they need to be “given” some of the network goodwill of their boss.

    There are other factors, but I would be interested in peoples’ views on this one.

  6. Steph Gray on 26 August 2012 at 12:35 pm

    I wonder if an easier and more fruitful interchange should happen earlier in people’s careers – like Jonathan, Tim and others, I’ve moved in and out of the public sector more than once but at junior or middle management levels. Frankly, at very senior levels, I think it’s unrealistic to expect people to move seamlessly from one sector to another; but I imagine what we’re trying to avoid is a situation where it is common at senior levels to have only experienced the public sector, and worst of all, just a narrow subset of it.

  7. Jill Rutter on 28 August 2012 at 4:52 pm

    Thanks Jonathan.. the Natwest scheme looks pretty much like the way the Australians say they went about making a success of bringing in people from the private sector http://www.instituteforgovernment.org.uk/blog/4527/lessons-from-a-land-down-under%e2%80%a6/

    which as you will see was a big contrast with Gus’s rather offhand dismissal of their relative underperformance while taking no responsibility.

    Its interesting on Steph’s point, that while the civil service regards the top as the place to bring in outside talent, other organisations would do the reverse. I agree that we need more people with more varied career paths

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