The effectiveness of the latter is measured by the growth, profit and/or the return to the investors.
The emphasis has to be on maximising profits.
In local government this is not the case. Here, the emphasis has to be on the effective application of the Government Acts by which councils operate, providing an effective service to their community and maintaining rates at acceptable levels.
So how does a local government CEO make a reputation and how do we measure their effectiveness?
We are constantly hearing that we are in a time of rapid change, one in which we will have at least seven jobs in our working life, but is this really the case or is it just part of the change merchant philosophy?
I contend the local government scene has not significantly changed in the last few years.
The same problems are out there in the landscape as were there 30/40 years ago. Generally, the same farming systems are in operation (but are more intensive), the same roads are wearing out and the population has not altered to any great degree. So why the need for major restructurings?
Usually the new CEO is from outside the local area and so arrives without a detailed understanding of the local issues. The new CEO brings in their own second-tier managers who, again, are usually from outside the area. Senior staff have to re-apply for their jobs and may not be reappointed.
This is called "cleaning out the dead wood" but, in reality, it is a cleaning out of institutional knowledge. The result is a new senior management team who lack local experience, don't understand the local systems and don't know their staff or the local community.
This lack of local knowledge doesn't matter because senior staff are all now beholden to their CEO who was appointed by the elected councillors (or the mayor) and so are relatively secure as no council is going to admit they were wrong.
If the restructuring is not successful the CEO moves on at the end of the contract with the reputation of being a person not frightened of change and the next CEO then has to undertake another restructuring and so the system staggers on.
Restructurings are expensive, disruptive, bad for morale and can result in many services being contracted to outsiders. These outside companies bid for the contracts with the lowest usually being successful.
The lowest bids often mean low wages for staff as this is where costs can be cut. If "redundant" council staff are employed by these contractors their conditions of employment are often less than their previous council conditions.
But this is not the problem of the CEO. Most ratepayers would be happier with a permanent team of experienced council employees looking after their infrastructure than contractors who are liable to change every three or more years.
Observation during a career both in central and local government has led me to believe those CEOs who made minimal administrative changes have been the most successful.
Any competent CEO should be able to make small structural changes as the need arises. If not, they should not have been employed.
However, for a CEO to make a reputation they seem to believe implementing major restructuring is the way forward.
These "change merchants" make a reputation for themselves whereas a "steady as she goes" CEO does not?
Maybe it's time CEOs were rated on their ability to minimise disruption and change rather than creating it.
Maybe all change is not progress.
Garth Eyles is a land management consultant and author and lives in Napier. Email: editor@hbtoday.co.nz
