This is a really interesting point. Amazon dumps a lot of money into R&D and until recently ran with a deficit ($41 million deficit on revenue of $17 billion in Q3 of 2013). Amazon gets away with (relatively!) minor profit margins because their investors understand that the value in the company is tied up in its assets and its ability to generate increased profit in the future.

I’m not sure there’s an example of this in the public or third sector? Any publicly funded body which ran at a loss would be viewed as a risk – regardless of whether the service is delighting customers or not. And that’s because they are not operating on the promise of an eventual return of investment + profit. With this context, I think that’s why it’s been so traditionally hard to take risks and reorganise. The emphasis is on delivering service sustainably (read – within budget). Not (as with Amazon) delivering service that delights customers and attracts even more customers.

That’s not to say I don’t think public organisations should be more entrepreneurial in their approach – but the perception of ‘gambling’ with public money needs to be addressed first.