Transcript - to Graham Love, Chief Executive, QinetiQ Group plc

Nicholas O’regan, Professor of strategy and innovation talks to Graham Love about strategies in business.

Nicholas: USC transferred from public to private ownership. What were the key cultural challenges and how did you address them?

Graham: Well it was obviously quite a big shift, not only from public to private ownership, but from a research organisation to a services organisation.

Now I often say that was actually the big change, we employ principally scientists and engineers that’s our intellectual capital and keeping scientists and engineers focused on willing to earning money is sometimes quite challenging because they want to pursue the next great idea.

So in many ways, that was the bigger change instead of public to private, to moving from research to solution. But clearly there are differences; there are differences in terms of motivation.

The biggest single difference frankly between most public sector organisations and private sector organisations is that you have very clear output measure in private sector organisations, which is typically bottom line profits, things like shares and shareholder value where as often in a public sector organisation there are broader objectives for the public grid for the national grid and so trying to combine those commercial imperatives, the need to make money, the need to satisfy customers, without losing the really positive aspects, service aspects, public sector ethos and that sort of inventiveness and has been one of the challenges I think that probably encapsulates the sort of challenges one faces from a front line tier.

Nicholas: Do you detect significant indifferences in terms of latitudes for developing and implementing in a public sector orientated organisation and privately orientated organisation?

Graham: I think there is and there isn’t. Many public sector organisations don’t have a great deal of strategy and their told what their mission is by the government, or to which part of the government they report too.

And there job is to really get on and do that whatever it happens to be. Clearly a company board has much wider remit. Its objective is to deliver value to shareholders therefore it has a lot more flexibility and freedom to select strategies which will work for that.

 So I think you see a lot more strategy in the private sector, there’s a lot of what’s called strategy in the public sector, but on the whole it’s about tactics rather than strategy.

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