In the stock market, there are two kinds of companies. Growth companies are rapidly growing in size, chasing a large opportunity, starting new lines of business and focusing on increasing their top-line revenue. For example, Facebook has 500 million users, $2 billion in revenue, and is focused on growing users and revenue, not profitability at this exact moment. On the contrary, there are value companies whose revenues are flat to declining and they’re focused on extracting profitability by cutting as much costs as possible.
My question is: Why do we always think of government as a value company? Why do we not think of government as a growth company and focus on creating new services, opportunities and revenue streams? That’s the kind of organization that generations X and Y want to be part of developing for Gov2020. The January-February 2011 Harvard Business Review was devoted to the theme of business model innovation with five separate articles tackling the premise that business models are changing faster than ever and companies must adapt quickly. Newspapers, for example, are grappling with the declining subscriber base while being creative with new opportunities from tablet computers to daily deal sites.
Government is in a similar boat with a rapidly declining tax base, rising benefit costs — from pensions to health care — and increased service demands. But instead of focusing on how to cut costs, government should be thinking about how double its revenue through innovation. This is the perfect time for government to think through new opportunities and services to increase revenue streams. I’m not talking about increasing taxes, but about creative economic development. Technologists can help lead the transition.
As such, here are my unsolicited five ideas to increase revenue:
1. Expedited Services — Citizens are used to paying more when they have run out of time. That’s what FedEx 1-day shipping is all about. Think about adding expedited surcharges for items like business or building permits, nursing license permit renewals, and more. At the federal level, U.S. Citizenship and Immigration Services instituted a “fast lane” for immigration filing where for a premium charge, you could have your file expedited.
2. Pay for Convenience — American Express Centurion (a.k.a. the black card) cardholders have a special 1-800 customer service line. What if businesses, citizens or nonprofits could pay extra for convenience? For $149 year, a business could get a special phone number that they’d know will be picked up every time within five minutes by the best government customer service staff. What if you could get a “government concierge” who’d walk you through the paperwork needed to start a small business and navigate you through all the departments? Everybody would pay for that.
3. Charge by the Channel — Most companies charge by the channel you contact them through. For example, unless I pay a premium, Bank of America allows me three personal visits a month and the rest I have to do electronically. The same newspaper costs $1 in print, free online and $4 by subscription on iPad. Similarly an agency could increase revenue by charging different costs by interaction.
4. Create Ancillary New Revenue Streams — Government has a lot of nonmonetized assets that are sitting around. The Transportation Security Administration increased revenue by allowing advertising in their bins used to go through security. You could add short-circuit TVs in your waiting rooms and sell advertising, or add TVs with advertising in your elevators like most commercial buildings do.
5. Make it Easy — Too often it’s too hard to stay in compliance with government regulations. Whether it is renewing licenses or complying with standards, the government makes customers really work. By making it dead simple and easy (one-click checkout, payment collectors come to you, great help on staying compliant), cities and states can increase the rates of compliance and increase revenues.
Those are just five ideas. Your employees are the ones talking to citizens and stakeholders every day. What are citizens asking for? Are there ways to deliver new services or new ways to increase revenue?