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Leadership, innovation & digitisation in the public & private sectors

What differs the leadership skills needed in the private and public sectors?

Innovation and digitisation in the private and public sector

Council mergers, a growing population and aging infrastructure, as well as the increasing pressure to deliver diverse and fast digital services to the community in the face of budgetary constraints, are just some of the issues faced by local government leaders. While we are seeing pockets of innovation and digitisation, according to the latest research by consulting firms such as Deloitte, the public sector still lacks the leadership required to drive technological advancement on a wide scale.

Private versus public: comparing leadership skills

One of the major differences between the private and public sectors are their respective drivers for performance. While leaders in the former are highly incentivised, their counterparts in local government are mainly driven by the need to provide public services and value. The pressure to deliver is often higher, with limited reward or recognition for a good performance.

Each specialist might have a different view. Sophi Bruce, Leadership Program Specialist with the Institute for Public Policy and Governance at University of Technology Sydney, says that for the most part, only subtle differences exist between leadership styles in the public and private sectors. But, she adds, there are some specific capabilities that are unique to the public sector.

“The main difference is the purpose and focus,” Sophi says. “Skills and motivations for public-sector leaders are influenced by a public moral and ethical responsibility, as well as having to be accountable to multiple stakeholders. Their role is to deliver the best outcome for the public, being transparent across all processes and the way they spend money in particular.”

One great point Sophi emphasises is the ability to collaborate. This is a critical skill required of leaders in the public sector. It is important to note that this is different from cooperation. Collaboration is about working with different interest groups for the outcomes of the community.

Another specialist, Adrian Tyler, Managing Director at allaboutXpert Australia, suggests that often senior professionals in the public sector reflect a “servant-leader” mentality. Servant leadership is where leaders function as servants first — that is, their aim is to serve first and foremost, which leads them to aspire to become leaders. Servant leaders make community and stakeholder needs their biggest priority.

Evaluating leadership qualities

According to recent Civica research, The Changing Landscape for Local Government, which surveyed senior Australian local government leaders, of all the skills deemed crucial for local government leaders in 2025, the top three are:

  • clear vision
  • strategic planning
  • expert coordination and management of multiple stakeholders and teams performing numerous roles.


Sophi Bruce suggests that in the rapidly changing local-government environment across Australia, with the onset of mergers and strong population growth, a long-term strategic outlook and a good sense of judgment will be important.

In this climate of change and digital innovation, it is imperative for public-sector leaders to be future thinking and strategic. Moreover, it is important not to forget the traditional requirements of a public-sector leader. The very nature of the role – being a public servant – necessitates strong stakeholder engagement and change management.

Public versus private: which is more innovative?

Technological change is breeding new models which disrupt conventional ways of doing business. Examples of companies transforming traditional models include Uber, Airbnb and Transferwise, which all operate on peer-to-peer service models. Moreover, the growth of automation is leading to unprecedented levels of innovation, enabling greater productivity, profitability and cost savings.

Interestingly, despite the perceived technological transformation from the private sector with the growth of digital disrupters, according to a new study by Centre for Workplace Leadership, public-sector organisations are more likely to have reported high levels on both types of innovation. The survey found that just 18 per cent of private organisations reported high levels of innovation compared to 34.6 per cent of their peers in the public sector.

If the public sector is to emulate the kind of success and satisfaction achieved by disrupter organisations it will need to become more aggressive in the way it inspires and brings people together. It also needs to be more collaborative, collegiate and agile to meet the needs of constituents who are increasingly looking for mobile enablement.

Digitisation: Government still lagging behind the private sector

According to Deloitte, around three-quarters of public-sector employees believe digital technologies are disrupting the way they work, while 96 per cent say the impact is significant.

However, it appears that the public sector is still lagging behind the private sector, with 80 per cent of its workers believing that the digital capabilities of government lag the private sector

Yet, compared to its global counterparts, Australia’s public sector has come a long way in terms of digital transformation. The federal government’s establishment of a Digital Transformation Office last year can be seen as a potentially significant step towards achieving greater digital service delivery.

However, if the public sector truly wants to transform its image as a digital laggard and innovation straggler, it’s obvious that what’s needed are senior leaders with a clear vision and strategy who prioritise digital while breeding a company culture which is dedicated to innovation.

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