The Paradox of Taxpayer Value

Something awful happens when a business focuses its resources on achieving shareholder value. Things are done that improve the bottom line, but risk the long-run viability of the business. Before long, it’s a lean mean business machine that is unable to deliver because of high staff turn-over and abysmal customer satisfaction. Without the right staff, and without a demand for product, the writing is on the wall. It’s not that shareholder value is not important, it is – but rather that, the road to shareholder value is paved with having the right people to do the right things, and having a product or service that customers want, that meets their needs. Shareholder value is a happy side-effect to being successful in business, and paradoxically, when companies focus on shareholder value instead of the things that lead to business success, companies fail.

Despite clear indications that focusing on shareholder value leads to corporate dysfunction and failure – the parallel concept in government, “taxpayer value” has grown to be the dominant focus. The focus is on achieving the lowest possible tax rates – both corporate and individual. Unfortunately, a focus on “taxpayer value” will lead to the same dysfunction that it yields in the corporate world. There is reason to believe that the road to “taxpayer value” is paved by having the right people do the right things, and providing high-quality services that meet the needs of the public.

The relentless focus on “taxpayer value” has resulted in a situation where there is a lot of frustration – and seems to be leading to a situation where the government struggles to attract and retain the best and brightest and seems to be struggling to provide high-quality services that meet the needs of the public (particularly in the healthcare and education sectors). The government seems content with a command and control philosophy – even though, it seems that the world has shifted towards collaborate and innovate. I do not believe, absent a shift in thinking and a change in course, that this will end well.

If companies can shift their thinking and recognize that the road to shareholder value is paved by focussing on their human resources and their customers – why can’t government be capable of a parallel shift in thinking and recognize that the road to taxpayer value is paved with employee engagement and services that meet the needs of those who use them? There is nothing in particular about government that makes collaborate and innovate impossible - rather, all that is needed is the courage to do so, and the commitment to the public service and those it serves.