Governance Bites #132: Public-to-private leadership lessons, with Dr Richard Carson

In this episode, Mark Banicevich interviews Dr Richard Carson on the leadership lessons gained from advising three state governors—and how they translate into today’s corporate boardrooms. They explore the culture shocks public leaders face when moving into private governance, from shifting accountability to adapting to faster decision cycles. Dr Carson shares crisis management strategies, coalition-building insights, and ways boards can leverage public sector skills to manage risk and drive purpose beyond profit. Packed with real-world parallels and practical advice, this episode is essential listening for directors, executives, and anyone navigating the intersection of public service and corporate governance.
Richard H. Carson is a consultant, author, and academic researcher with a 40-year career focused on organisational change management. He is the CEO of Carson & Associates, a consultancy he established in 2017 to serve public-sector and non-profit organisations. The firm specialises in making organisations more performance efficient and cost-effective through services like strategic planning, human resources, and executive coaching.
Dr Carson’s has served as a senior policy analyst for three Oregon governors and held numerous public sector management roles. His doctorate research in organisational psychology at Washington State University resulted in his trademarked “People Sustained Organizational Change Management (PSOCM) model”, a comprehensive, three-phase, 10-step framework for managing workplace transformation.
Dr Carson authored “The Book of Change” (see https://www.bookofchange.com/ for a free PDF), a practical, step-by-step guide written for business and government executives, consultants, and students navigating organisational change. Dr Carson has also served on several boards, including the Oregon Development Network, the American Planning Association in Oregon and Washington, and Kit Carson Historic Museums.
#LeadershipLessons, #Governance, #BoardOfDirectors, #CorporateLeadership, #PublicToPrivate, #ExecutiveInsights, #BusinessStrategy, #CorporateCulture, #CrisisManagement, #StakeholderEngagement, #PublicSectorLeadership, #BoardroomInsights, #LeadershipTransition, #CorporateGovernance, #PurposeDrivenBusiness

Transcript

0:00

My name is Rich Carson. I wrote The Book of Change, which is about a process I developed in terms of organisational change management [OCM], which is based on my forty-five years of experience, thirty of it was as a manager and another fifteen as a consultant and academic, where I did my doctorate studies in organisational behaviour. And today we're going to talk about public-to-private leadership lessons. Yes. Hi, welcome to Governance Bites. My name is Mark Banicevich, and as you just heard again, I have the pleasure of spending time with Dr. Rich Carson. Rich, thank you very much again for your time. Thank you. The topic is‘Public-to-Private Leadership Lessons’, and we've got the subtitle, ‘Learning from Advising Three State Governors and How Those Lessons Apply'in Today's Corporate Landscape.’ Yes. Nice meaty topic.

I'm going to start with the question: 1:01

What is the single biggest culture shock for a public-sector leader who transitions to a corporate board, and how can the board help them to navigate that culture shock? Well, I think the first thing is to understand that you're dealing with two sets of cycles. You're moving from an environment where you deal with election cycles to economic cycles. The other thing is that you're shifting from kind of votes to dollars and politics to profit. And so those are really the major distinctions that a manager in transition needs to understand. They do sound quite scary. How can the existing board help a new director to navigate that change? Well, I think they need to basically spend some time. You need to hire somebody that, first of all, you believe can make the change, and in the interview process, really dig deep into that and ask them how they're going to do that. I remember one job, a guy asked me, he said,“Well, how are you going to manage 165 people?” I said, “I'm not.” So, “I'm going to manage seven people,"and they're going to manage 165 people.” So, you really need, as a board, to, you know, and you may need to hire somebody as kind of a consultant, and there are people who do that, to help you with the hiring process to make sure that you hire somebody who has the skill set to make that transition, but also provide them with the adequate resources to make the transition. You've alluded to the fact that in the public sector, your accountability is either to the public or a legislature or a governor or government. How does a leader's mindset shift when they're suddenly accountable to shareholders in a board? Yeah, I thought about that. It isn't really that different. Certainly, the goal and maybe even the performance metrics will be different, but you're still dealing with some group of people, whether it's the public or consumers. You still deal with vendors. So it's that kind of, in terms of who you're dealing with on a day-to-day basis, isn't really all that different. I think just in terms of what the goals and the metrics are, are very different. Yes. Yeah. And another, well, another can be a key difference between corporate and public, is the pace of change. The pace of change in government tends to be eye-wateringly slow. How can a public-sector leader who may be used to a long legislative cycle, as you've said, four years for you, it's three years for us in New Zealand, how can they adapt to the speed and agility required for corporate governance? My personal experience is you don't really need to do that. And the reason is that although you may have a, in the public sector, you're right, you have a legislative process, all kinds of people involved in it, it takes forever, but as a manager, for me it was day-to-day, and there are things that happen in the public sector. I'll give you an example: unforeseen events. I went through a flood where the city I was managing went underwater. I had a case where I actually had one of the groups I had was animal control, and a dog killed an eight-year-old boy. So, day-to-day, you still have to deal with issues that come out of nowhere. So it isn't like you're not only, I mean, certainly part of your job is managing the legislative process for the elected officials, but the day-to-day issues is whatever walks in the door that minute, and that doesn't change whether you're in the public sector, or the private sector. As a manager, it's, you know, it's always something. Yes, yes indeed. Your job is, you know, one of the things I learned is that people really rely on you to make the hard decisions. When something bad happens, they come to you and they go,“This just, what are we going to do?” And it's your decision, for better or worse, to make that decision and deal with it. So it's the same in both the private and the public sector in terms of the kind of things that, a manager has to be able to be a person who thinks on their feet. Yes. Yeah. That's true. You've advised governors. What's a lesson from managing a public crisis? You just gave a couple of examples — a natural disaster or a budget shortfall — that is directly applicable to a corporate boardroom facing a major reputational or financial crisis? It's, you really need to kind of manage the message. In other words, once you determine what the issue is, how you're going to deal with the issue, you really need to communicate that issue, both to staff, to the public, to any number of people. So you need to really craft a message that answers people's questions now, and it has to be a message that is consistently delivered by the board, by the manager, by whoever is empowered, your communications person, whoever, anybody who is empowered to answer those kind of questions. So, really kind of, you know, I don't want to sound negative in terms of managing the message, but people do want to know what you're going to do, how you're going to do it, when you're going to do it, and you need to be able to think through that and provide that information. Yeah. And the board has to be on board. I mean, you know, they have to say, “Yeah, okay. This is what we're going to do."And these are going to be the people that explain the situation." Right. Yeah, I like that. That's a great pickup. Thank you. How can a corporate board and a chief executive officer [CEO] apply the art of coalition building? You know, if you're working in government, that's one of the key things that you have to be able to do, right. You have to be able to work with others, particularly from across different political parties. It's an essential skill for a governor. So how can a corporate board and a CEO apply that art of coalition building to get buy-in from diverse stakeholders like investors, employees, regulators? Well, it's a very similar process. One is to, you can use, well, you can use surveys. Okay. In other words, to kind of get some idea of what people are thinking, feeling, what they want. You can use focus groups of individuals around a particular topic. You can bring in essentially opposition leaders and sit them down and say,“Look, is there any common ground here?” It doesn't really matter if they are in the private sector or the public sector, you know, you can still get, you can still bring people together and sit down and talk about issues and try to find solutions. I think you do a lot more of that just because you have to in the public sector than you do in the private sector. So it is certainly a skill set from the public sector that can add value in the private sector. And as you say, you start by collecting broad information through things like focus groups and surveys, and then get the people around the table and have solid discussions. If you're in the private sector, I mean, you're dealing with, you know, management and labour. Yes. You know, there's a whole process you can go through and hire people to help you to, you know, kind of resolve the issues. But, you know, that kind of thing happens all the time in the public sector because there's always somebody who wants to do this and somebody who doesn't want you to do that. There's always the citizen activist group versus the developers. You know, so in any job where you're a manager in an organisation, you're going to have opposing viewpoints internally and externally that you need. You know, part of your skill set needs to be to help resolve those issues. The board, whether it's elected or appointed, if the board feels that you aren't able to resolve those issues, then there's a problem. They hire you. They don't want to do it. They basically want to be the good guys. They hired you to resolve these issues. So, you need that skill set regardless. Great. Yeah. Thank you. What is the most critical public-sector leadership lesson that corporate boards often overlook, and what's the cost of missing that? The most critical public-sector leadership lesson that corporate boards miss? Well, I think that it starts with who they hire. I've experienced this personally. Sometimes you hire somebody because you like them or because they're your nephew. I've gone through this a couple of times, and you know, you need to hire somebody based on their abilities, not who they know, but what they can do and what their skill set is. And a lot of times they hire people for all the wrong reasons and then wonder why things go south on them. So, I think the most important thing you do is really, even if you have to hire a headhunter, you need to really have an adequate process to vet somebody to make sure that they are psychologically a good fit for your organisation. Not just their skill set. It's not whether you just like them or don't like them, but you really need to have a very comprehensive process to bring somebody on board. And that also applies all the way through the organisation, but specifically to the board when you're going to hire a manager. Yes. Yeah. Absolutely. If you've got a board member, a person moving from a public-sector leadership role that may be, you know, used to a command-and-control environment and then moving to a private-sector role, where they have to rely on influence and collaboration, what's the board's role in helping that public-to-private sector leader succeed? Well, first of all, when it comes to command and control, it depends on your job. In the public sector, if you're the police chief, it's very much a command-and-control job as opposed to an urban planner whose job is citizen involvement. Everybody should feel good. You know, the biggest problem I had in my organisation was I had a group of planners and a group of engineers, and believe me, they do not understand each other. They're like, they're like from different planets. I had to actually be the, I had to be the translator between the two groups. “This is what they're trying to tell you.” So, anyway, give me the question again. Yeah, sure. Just if you've got a leader moving from the public sector to the private sector and they have to transition to this influence and collaboration model, what's the role of the board in helping that new leader or new director succeed in the new environment? Well, it's like I said, it's up to the board to really understand who they need to hire in terms of what is their skill set, what is their temperament, you know, what is their, so not only professional profile but psychological profile. In terms of, you just don't hire somebody because somebody told you they were really great. It, you know, it depends on, of course it depends on the size of the organisation, but there's lots, lots of ways that you can do kind of skill assessments for a management position like that. I think it's really important that they get that right the first time. There's nothing worse than hiring an executive who just pisses everybody off, both on staff, in terms of the public or vendors or consumers, who really isn't a good fit for the job. So, the most important thing for the board is to make sure that they follow a strong process to find the right person for the role, and then induct them well and give them the right sort of training and stuff going forward. But the most important thing is to hire the right person in the first place. Well, I mean, there's two parts. One is, what is the industry they're in and how well does that person understand their kind of venue? But also, is their management strengths and weaknesses. Aside from the industry needs and their understanding of the industry, just as a manager, as a, to manage people, budgets, expectations, you know, how good are they at that? Yes. Yes. Public-sector leaders are often highly skilled at navigating, you know, political environments, regulatory environments. How can a corporate board leverage that unique skill set to better manage their external risks? Well, I think whether you're a manager, an executive director-type in the public sector or the private sector, you really have a different set of customers, but you really have to have the ability to, maybe more in the public sector, but really kind of get people to understand your point of view and understand their point of view and bring people together or get or kind of coerce people to do things one way or another, you know. So in that way it's very, very similar. Right. Right. So, in terms of using that skill set to manage their broader risks in the environment, what can the corporate board do to say,“Hey, we've got somebody here"who's used to navigating this landscape around people,"how can that be used to better manage corporate risk?" You know, that's interesting. Most corporations have somebody on board who's called the risk manager. And the risk manager's job is to kind of troubleshoot and be very kind of preventative in terms of,“Well, don't do that because this will happen or, I mean, there's laws about this,” etc. But what they rarely have is a change manager, who is somebody who is proactive. Like you said, it's a fairly new field, but a change manager is really somebody who can look out at the greater environment, who kind of over the horizon, and help the organisation and the board identify issues that need change. Or that they, you know, whether they may pick up something that's going on within the organisation, the board is clueless, is going on, that needs changing. People are saying, “Look, you know, there's this change"in technology called artificial intelligence [AI], and what's that, you know, what does that mean?” And, you know, it's, “Are we going to lay people off?” You know, so risk management and change management are totally, really, totally reactive versus proactive, and you really need a person or a position and that's their sole job. If you, if you can, you know, if you're a large enough organisation. A lot of times that person ends up being either the risk manager or the human resource [HR] director who takes on that role, but is not necessarily trained in the change management process. Right. Yeah, that's an interesting point. Thank you. Given the increasing scrutiny on corporate social responsibility, we've got this major trend happening globally around social responsibility for corporates, how can a board use lessons from a governor's focus on public interest to ensure that the company's purpose goes beyond just maximising profit? I think that social responsibility is something that is often overlooked by the private sector. A good example is Bud Light. Okay. Yeah, tell me about that example. Bud Light basically, the Budweiser, Anheuser-Busch, hired a transgender spokesperson to sell their beer to Bubba down at the tavern, and it just blew up in their face because the people who drank Bud Light were so offended that Bud Light lost. It was the best-selling beer in America, and it lost that number one position out to Modelo because people quit drinking it. Wow. So, I mean, it's very, you know, it is incumbent on the private sector to understand what they're doing in terms of social responsibility. They may be, they may be thinking that they are doing something that's very trendy. It may be something that they personally feel needs to be done. But they also need to understand who their customers are. You know, being socially responsible for the wrong people is a deadly recipe. And I think the other example was Target, who started selling clothing for transgender children, which was bizarre, but they suffered the same problem in terms of not understanding the mood of folks who were their customers. So social responsibility is really relative to your customer base. If you, if you are going to impose social responsibility on a group of people who don't agree with you, that could, that could backfire. Yes. Right. I've got one final question for you. What advice would you give to a director who has public-sector experience and is moving onto a private-sector board? Well, I think basically to understand that, you know, you're moving from, you know, kind of the public sector in terms of the legislative process, that kind of thing. You have a totally different metric in terms of profit and what people want in terms of profit. And that's, you know, having, having spent most of my life, I had as a consultant, I've been in the private sector, but most of my life as a public-sector manager, I had not looked at profit. Profitability was not high on my list. Budgeting, absolutely. Being cost-effective with the public's resources is imperative, but it's not profit. There is no such thing as profit in the public sector. So that, that would be a very, you know, difficult metric to keep top, you know, keep top of mind. Right. Richard, we've covered a lot in this conversation, everything from the significant differences between public sector and private sector, for example, moving from political cycles to economic cycles and the focus on profit in the corporate board. We've talked about understanding your customer base and making sure that the decisions that you make are aligned with your customers' values. Right. There's been some really, really interesting insights in that. Richard, thank you very much for your time. I really appreciate it. Thanks for having me on. I'll hopefully speak to you again soon, and I'll see you next episode. Thanks. Thank you for watching this episode of Governance Bites. We have more episodes on YouTube and your favourite podcast channel, where I interview directors and experts on various topics relating to boards of directors and governance. We'd love to see you back, and please like, subscribe, and share the videos and podcasts.