Create a senior public service, hold them accountable for ‘system’ outcomes and embed a culture of experimentation, writes Stephen Taylor
Why is it so hard to change how the public sector works? Reviews, reforms and reorganisations abound, but productivity has fallen and almost three-quarters of the public think the quality of services has declined. It’s not for shortage of ideas: think tanks brim with them. But they somehow lose their way on the journey to action. The ‘easy’ answer is more money, though that doesn’t always bring better results and can be a substitute for confronting the real problems – not to mention the difficulty of actually finding the extra money.
In the market economy, the process of ‘creative destruction’ constantly drives change. In the public sector, failing organisations may eventually be restructured or abolished, while the ballot box allows the public to show their dissatisfaction. But these are slow responses compared to the hard immediacies of bottom line, share price, insolvency and takeover.
We’ve known for decades that the best way to help people and places tackle multiple challenges – whether related to housing, skills, education, income, employment, mental or physical health, disability, abuse, substance misuse or crime – is not through multiple public services each with their own criteria, thresholds and targets. What works is when government develops a sustained relationship rooted in knowledge of an individual’s overall circumstances, their assets and their hopes. The government-sponsored Changing Futures Northumbria is an excellent illustration because it freed caseworkers to build trust and provide immediate practical support rather than make a series of assessments.
That’s all very well, I hear you say, but surely far more expensive? On the contrary, the evidence is that when public services take a holistic approach the number of interactions, and hence the cost, can drop quickly and dramatically. Given that 2-3% of people and localities account for some 20-30% of local public expenditure, the potential savings are colossal.
We’ve also known for decades that it’s better to stop problems arising in the first place than to pick up the pieces afterwards: prevention is cheaper than cure. The sooner preventative action is taken, the higher its value. Early intervention grounded in communities is the most effective. Brent’s evolving Working in Neighbourhoods (WiN) initiative, for example, creates a relationship with its most vulnerable residents which moves support upstream, addressing underlying causes rather than responding to crisis.
Why, then, is local public provision still shaped around organisations and the services they supply, not around people and the places where they live? An oft-cited reason is that the UK is siloed and centralised, each government department setting its particular policies and objectives with little cognisance of others while imposing onerous measures and controls that assume places are all much the same.
The current devolution of powers and expenditure to mayoral strategic authorities, now supercharged by a new prime minister, is a welcome response to this weakness. It brings decisions a step closer to the particularities of people and places. For example, if the mayor has a hand in how local NHS money is spent, there is a better chance it will mesh with the local authorities’ spending on social care. Five pilot projects are now underway, exploring how pooling service budgets can achieve better outcomes at lower cost.
Spanners in the works
There are, however, three spanners in the works. The first is that the present service-based way of working is hardwired by organisation structures, legislation, professional protocols, training, inspection, work rotas, budgeting procedures, data access, performance indicators, physical location and more. That’s hardly surprising: we’ve done it this way for a long time, so of course the glue has set around it.
A crisis, a determined leader or an injection of government project money may remove some of that rigidity for a time, but when the crisis has passed, that leader moves on or the money is spent, the organisation likely defaults to the status quo. It’s a long-haul challenge, not an overnight task, to build a different framework sustaining new skills and behaviours.
The second spanner concerns the answer to the question which always gives most insight into how any organisation really works: how do you get on round here? In the private sector there must be a reasonable fit between this and what the business needs to do to succeed.
An example: years ago I was asked by the CEO of a large British company to advise on what seemed an intractable problem. The company’s six divisions were competing fiercely with one another to the point they would sooner see business go to an external firm than a fellow division. The reason turned out to be simple: 80% of a division head’s annual bonus turned on the division’s performance, 20% on corporate performance. When the board reversed that, behaviour changed immediately.
How do you ‘get on round here’ in the public sector? Essentially by what Dan Honig, a professor at UCL, calls compliance: do as you’re told, follow the process, complete the paperwork. His colleague Rainer Kattel puts it more starkly: public sector culture too often rewards covering your back more than creating value.
Much activity – emails, presentations, meetings, strategies, reviews, documentation, reports – has little real-world outcome. It may also diffuse accountability in the guise of maintaining alignment. The chance of being dismissed for poor performance is an astonishing 100 times greater in the private sector than in the public sector.
When things go wrong, the public sector tendency is not to think afresh but to tighten further: more guidance, procedure, regulation and upward reporting so ‘it will never happen again’. Such micro-management is demotivating and leaves still less scope for thoughtful discretion, experimentation and improvement.
Decisions in this environment move upwards to the point where those at the top ultimately fail, if only from exhaustion. Hence the best leaders understand a seeming paradox: that to hold on, you must let go. Steve Jobs of Apple put it succinctly: “It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.”
Successful businesses know this. They maintain and enforce absolutely a minimum number of ‘tights’ but maximise the ‘looses’ so that local operations are freed to respond to local circumstances. The centre steers rather than rows, understanding itself as the focus of a learning network not the pinnacle of a command structure. Back in 2004 Sainsbury’s renamed its head office Store Support Centre to underline this kind of cultural shift.
Devolution of decision-making is more difficult in a political environment. Opponents will seek to point out the flaws, even if only ‘too little, too late’, so blame is designed in. Those who gain may have little to say while those who lose may complain loudly. This rightly puts an onus on making the case for a decision and explaining it clearly. The public eventually lose patience with those who criticise without offering constructive alternatives.
The third spanner is that all the big issues confronting the public sector – housing, crime, health, the environment, transport, education, immigration, economic growth and security – are systemic. Making progress, much less ‘solving’ them, is not within the gift of any one organisation. It requires effective interaction over long periods between many players who have a collective awareness of what the system does and how it responds to intervention.
It follows that such issues can only be addressed through mutual comprehension and collaboration between organisations. Given that local authorities often struggle to persuade their own directorates, functions and occupations to collaborate, it’s a lot to ask them to collaborate effectively with the local NHS, police, government agencies, educators, community groups, and private and third sectors.
Three proposals
As the world spins ever faster, top-down public sector management practices which may have sufficed half a century ago fall further behind. So what might help? Here are three proposals.
Develop a senior group across the public sector
First, create a Senior Public Service (SPS) consisting of the 8,000 or so top posts in government departments and agencies, local government, the NHS and police. Stipulate that promotion to this group requires meaningful hands-on experience in three of those four areas. Develop the SPS as a group and make it standard practice to move roles within it.
Why? Because all the challenges at this level of seniority are systemic, not standalone. This group have in common that they are expected to anticipate, comprehend, plan and deliver complex requirements in a fast-changing, exposed, political and resource-constrained environment. Insight from several perspectives about how the relevant systems are working –or not working –is essential to making them work better.
Of course there is specific know-how in being, say, the CEO of an NHS Trust, a chief constable, a council chief executive, a director-general in the Department for Environment, Food and Rural Affairs, the head of the Land Registry. But the people around you can supply that knowledge and it is less important than the commonalities.
Consider a company’s marketing director being promoted to CEO. They do not suddenly have to be an expert in finance, manufacturing, public relations, technology and HR as well. They do have to understand that the CEO role is different in kind and be able to knit functional expertise into creating the company’s future.
Think about system outcomes
The second proposal is to change senior-level accountability. The major parts of the public sector are best understood as professional service organisations. An organogram can show where a post fits in their standing structure, but today’s work is shaped around the needs of the customer.
Suppose a law firm’s client wants legal assistance in setting up an agricultural produce joint venture in Galicia. The firm will pull together a project team from across the company with the necessary mix of experience and skills to provide that. For the duration of the project that and other current client teams are the operative organisation, the practice and geographic structure the shadow.
The team members’ role is to work effectively with colleagues to make the project a success, not to represent, say, the contracts or acquisitions practice or the Spanish office and protect its interests. Applying this to a mayoralty, its senior officials – council, health, police, government agencies and others – are primarily accountable not for the work of their particular organisation or service but for the overall advancement of the place.
Similarly in central government anything that really matters cuts across whatever the structure of departments and functions happens to be at the time, because anything that really matters is systemic. So we hold top civil servants primarily accountable not for the achievement of departmental objectives (or, in parlance not that old, ‘for protecting the position of the minister’) but for their contribution to the Government of the day’s priorities.
Then it is not enough to say, for example, “I’ve provided my department’s input on reducing child poverty, job done.” Your task is to be part of the hard bit: assembling different perspectives and possibilities into a tenable way forward in a messy world.
Embed experimentation
The third proposal is to move further and faster across the public sector at the coal face towards leadership and coaching rather than control and supervision. This means cementing values as behaviours, setting direction, defining boundaries, growing capability, focusing on outcomes rather than processes and expecting a stream of improvement ideas.
You will not hear team members led in this way saying “You can’t do that because…” You will hear them saying “We could do that if…” The push to change how things are done then bubbles up from below as much as cascading down from above. Performance appraisal – ‘how you get on round here’ – looks very different: less about having the stated competences and hitting service KPIs, more about moving the game forward as a constructive member of a largely self-managing team.
Excellent ground-up programmes such as Test, Learn and Grow are giving public sector staff the adventure of doing things differently in this way to get better results. The next big step is to reshape the plumbing and wiring of the organisation to make this the natural practice, not a temporary departure from the norm.
These three proposals – create the Senior Public Service, hold its members primarily accountable for system outcomes and embed continuous experimentation and innovation at all levels as the natural way of working – might just make public sector renewal stick.
Stephen Taylor is Director of Total Place Associates and former CEO of the Leadership Centre. He has previously worked in the Civil Service.
