Can a Branson solve your funding woes?

3rd March 2006 at 00:00
Entrepreneurial spirit may be key to revitalising our flagging public services, according to a recent study by psychologists at the University of Maryland. Published in the Journal of Applied Psychology, the study by Robert Baum and Edwin Locke of the Smith School of Business tries to pinpoint the secret of successful businessmen such as Richard Branson and Alan Sugar.

A reliable pool of entrepreneurs is seen as more important than striking oil or gold if you want your nation's economy to take off. They are of interest because they appear to possess certain common characteristics - such as drive, and the ability to articulate their vision and so galvanise others - that help them reach the top. But while we usually think of entrepreneurs as private businessmen, it is now widely believed that they might be a key driving force to improve public services.

Traditionally we have assumed that the essential attributes of successful managers in large organisations, such as hospitals and schools, are an ability to communicate, sensible use of power, apt diagnosis, and keen decision-making. They manage established resources in established settings.

However, Baum and Locke identify a new facet of entrepreneurial spirit which they refer to as "new resource skills" and which they define as the ability to "acquire and systematise the operating resources needed to start and grow an organisation". The study found that by using nothing more than their entrepreneurial thinking skills, certain public and private sector managers are able to produce new resources out of nothing - findings which challenge the stereotype of public sector managers as a group noted chiefly for their complaints about lack of resources.

Of course there could be a perverse disincentive to engage in entrepreneurial activity of this kind; the more you manage to generate resources out of thin air, the more likely the Government might be to cut back on spending in your particular part of the public sector.

Perhaps the issue boils down to responsibility: who should make sure things work and provide enough resources? In the private sector, entrepreneurs shoulder the burden of nurturing a business; that is their raison d'etre.

In the public sector perhaps clearer guidelines are needed. With assurances that entrepreneurs wouldn't lose out, we could enable and encourage more enterprising activity within vital parts of the economy.

Dr Raj Persaud is consultant psychiatrist at the Maudsley Hospital in south London. His latest book is The Motivated Mind (Bantam Press). Email:

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