Building an Agile Public Sector in the Post-COVID 19 World.
The Need for Change
The average lifespan of S&P 500 companies has dropped From 33 years in 1964 to 24 years in 2016 and is predicted to be 12 years in 2027. Technological advancements have only accelerated the downward spiral. To a for-profit organization, it is a fight for existence.
Their survival depends on customer share of wallet, which demands continual innovation and improvement. Businesses that don’t adapt, shrink. The inevitable conclusion is getting eaten by a larger organization or simply evaporating into thin air.
Public sector organizations are an exception because they usually enjoy a life-time monopoly in their markets.
The COVID-19 pandemic changed much, but not that. However, just as it does business, disruption offers governments an opportunity to rethink their modus operandi. One of the quickest to take advantage of that opportunity was the UAE government.
"Our goal is a government that is faster in decision-making, it is more adaptive to changes, better in seizing opportunities and in dealing with the new stage in our history," Shaikh Mohammed Bin Rashid Al Maktoum said in a tweet when he announced the new cabinet, which has a year to achieve its mandate.
By consolidating its ranks in a quest to be the best-run government in the world, the UAE is dodging the worst effects of a non-competitive environment, which has made the public sector more risk averse than their private sector counterparts, and is capitalizing on the advantages of agility.
Other governments should take note. As we move towards more agile governance, governments need to optimize their structures, discover new ways of working, and create processes for allocating resources and leading people that improves the performance of every government organization and human asset.
The Case for Agile Transformation
Agile has different definitions and interpretations, and applies differently to different organizations. However, Gallup’s in-depth research has identified two key pre-conditions of agility in any organization:
- Having the right tools and processes to respond quickly to business needs.
- Having the right mindset to respond quickly to business needs.
Agile tools, processes and mindset create a competitive advantage, a cultural differentiator and a long-term benefit to organizations. Cultures that implement agile principles achieve 28% higher success rates in all projects compared with companies using a waterfall approach and 15% higher success rates in large projects. Highly agile companies achieve higher financial performance (71%) compared to organizations where agile principles are limited (35%) or low (10%). And 69% percent of agile teams consider the main benefit derived from adopting agile principles to be the ability to manage changing priorities.
Figure 1: Factors that Drive Agility
Unfortunately, according to a representative Gallup study in 2019, only 4 in 10 GCC employees think their organizations are responsive and adaptive to changes. This presents an opportunity to organizations to embrace agile principles and adopt a paradigm towards the future.
What is an Agile Government?
In the private sector, where agile is synonymous with customer-centricity, a multitude of measurable key performance indicators allow metrics that easily track agility within an organization: time to market, market share, revenue, profitability, customer traction, conversion, and engagement indicators, among others.2
Governments are not driven by those business needs -- its main mission is to achieve the aspirations of its constituents and provide:
- effective social services. This includes providing leadership, security, education, healthcare, and an assortment of other public services.
- a thriving economy built on jobs with livable wages that cultivate sustainable social and economic conditions in the community while promoting equality and opportunity.
- reliable infrastructure with a transportation system that facilitates mass movement of people and resources, enabling the development of society and economy.
- a strong social fabric that cultivates a positive, pleasant place to live for individuals, families, and all the entities that operate within.
The Three Shifts of Agile Transformation
Agility allows faster, more efficient achievement of those aspirations, but governments lack the lodestar of profitability that businesses have, and must continue to earn their constituents’ trust through transparent, fair and effective actions. Consequently, the organizations that operate within a government need to establish sets of agile KPIs that center on meeting the needs of the people to further build trust in the government and its leadership.
Gallup studied agile organizations and found that de-siloed communication, rapid decision-making, and innovation are fundamental to successful agile cultures, and those attributes can be adapted to government organizations to better align public sector service values and behaviors to constituents’ aspirations. Our recommendations include:
First: Reduce the silos and bottlenecks, and focus on authentic communication
Gallup’s global research regarding workplace perceptions on organizational cultures of agility conducted in late 2017 and early 2018 found that most companies lack key cultural factors that drive agility, most importantly knowledge sharing and cooperation.
In this research, which included interviews with more than 9,500 workers, Gallup found that only a third of employees strongly agree with the statement "In my company we openly share information, knowledge and ideas with each other.” Only three in 10 workers perceive adequate cooperation at work.
Hierarchal organizations tend to direct the flow of information from senior leaders to middle managers to the front-line employee. Technology has upended this pattern by making public inquiries, complaints, and desires available to all employees -- who are clearly not making best use of it. As Dale Carnegie once said, “Knowledge isn’t power until it is applied.” So building an agile public sector requires systems that collect and analyze the information pouring in and formatting it as feedback that improves the performance of frontline employees.
This requires breaking down barriers between isolated departments and upgrading cooperation to enable a swift response that benefits the public. Those systems should be constantly evaluated to prevent entropy and to continuously simplify processes, policies, and rules to make it easier and faster to provide effective government services. There are a variety of methods to sustain that approach -- nudging techniques, collaboration incentives, communication platforms -- but they should all involve an emphasis on the customer experience to empower the people and processes that better serve the public.
Second: Eliminate barriers in decision-making.
The public sector usually employs complex governance structures designed, in all good intentions, to protect public resources throughout the decision-making process. However, multi-departmental signoffs and power concentration at the top are barriers to a swift response.
Optimizing speed of decision-making is therefore critical to achieving agile government. That requires auditing decision-making protocols to reduce biases, create accountability and support timely and effective decision-making.
That assessment must examine the policy and cultural elements that prevent the empowerment of middle managers and front-line employees to create better customer experiences. Perhaps not coincidentally, Gallup’s regional research shows that public sector front-line employees are generally less engaged and feel less empowered than employees in other job categories, and those positions are typically considered the least prestigious.
But front-line workers are very often the interface between citizens and government -- to the public, front-line employees are the government. As a result, the lowest level, least empowered, most disengaged government employees conduct almost all conversations and in-person transactions with citizens. A shift in decision-making authority toward employees at the local level would speed government responses to citizens, and may increase the engagement of the employees the public see most.
Third: Promote calculated risks, decentralized innovation, and increased connectivity.
Agility requires allowing employees to try new things without fearing reprimand. Agility in government requires creating solutions, adding new methods, and establishing new ways of working with the end goal of improving people’s lives. But innovation is risky, and public sector employees are often risk-averse. Indeed, a 2010 public sector study revealed that risk‐averse individuals are more likely to end up employed in the public sector than in the private sector, and that risk taking is rewarded with higher wages in the private but not in the public sector.
Increasing trial tolerance in the public sector requires a culture shift. Trial tolerance needs to be embedded in the employee life cycle, starting with how talent is hired to how performance is assessed and managed. And leadership teams must explain the calculated risks they take and publicly recognize all employees’ hard-earned failures as well as successes.
The key is to this shift -- and positive outcomes from it -- is embedding a data-based testing approach to experimentation. The simplest method is to conduct pilot projects, not massive projects, with A/B testing to identify best outcomes. Incremental trials allow a culture of innovation and entrepreneurship to take root without the disruption and confusion that large-scale overhauls can cause
These shifts are best facilitated by internal and external connectivity through technology adoption. The GCC region’s investment in digitalization in both core service delivery and support elements made connectivity more readily available. But a shift from reliance on technology-supported services (i.e. filling an expense sheet online) to capitalizing on industry-disrupting technology (i.e. telehealth) will help enculturate innovation and the agile mindset in government agencies.
Agile Transformation Enablers
Agile organizations are fundamentally designed to adapt and respond to environmental changes and societal needs. Agility assumes that change is constant, and that organizations must be ready for change and able to meet that it.
Achieving this shift in government requires embedding five structural and cultural enablers in the organization’s strategy.
1. Purpose
Each public sector agencies should define and communicate its purpose – the very “why” of its existence -- which should be laser focused on its constituents’ aspirations and embedded throughout the organization.
Defining purpose starts with studying public aspirations and how they can best be delivered, then drafting public service values that support that purpose and pave the way for an agile culture. Public service values include meeting deep customer needs, allowing employees the time and authority to experiment and try new ways of working, and empowering employees at the front-line to respond and resolve customer issues. In selecting the public service values, public organizations need to think about what works in their own setting, as well as the needs of their own constituency across the different stages in the service lifecycle.
Leaders should showcase how these values work in real life through planned, focused, organization-wide communication and deliberate role-modeling. For example, leaders can demonstrate a shift in behavior by demonstrating faster decision-making cycles or by publicly recognizing employees who take calculated risks. By embodying these values on daily basis, leaders build those behaviors into the culture, and function as guides and coaches to employees as they learn to turn these behaviors into habits.
These behaviors should be part of the organization’s performance management system. Cross-functional business metrics keep leaders and teams accountable for meeting behavioral expectations and -- as with all performance management systems -- frequent review cycles and continuous feedback both vertically and horizontally improve outcomes.
Finally, the behavioral expectations that impede agility should be rooted out. For example, the value of “excellence” sets the expectations that everything must be perfect and fully thought through, which conflicts with agile principles that encourage trial and testing. Agility audits often discover policies that inadvertently encourage non-agile behaviors. A clear definition of purpose helps illuminate the behaviors that align public service values with agility and those that impede agility.
2. Structures & Processes
Ultimately, agility depends on how an organization is structured and governed. Unfortunately, there is no template for agile structuring and adding an agility department to a current structure will not create an agile organization.
However, all agile organizational structures do meet two key conditions, 1) they provide stable leadership direction and role clarity to different teams, and 2) they enable the dynamic creation and dissemination of cross-functional teams that are fully empowered while still accountable to their mandate. As a result, an agile organization is composed of empowered teams from different specializations that come together to achieve a specific mission -- a hexagon rather than the traditional org chart triangle.
Decision making is given, as much as possible, to the specializations to enable faster responses. Agile processes cater to more frequent scenario testing (Think, Do, Check) along with faster decision-making cycles. These cycles provide crucial information and intelligence to other organization cells. Leadership, therefore, has more time and resources to focus on strategic design and networking with peer entities.
That agile structure in a GCC public sector setting would, therefore, makes government as a whole a platform that integrates dissociated teams to create cross-functional collaboration to more effectively meet complex challenges that the society at large faces -- facilitating higher levels of trade, for example, which often requires the collaboration of four or more ministerial entities.
But that approach would cause a paradigm shift in career progression -- and a much needed one. The traditional government career ladder forces career-long competition for top jobs, which undermines trust and collaboration and focuses the entire labor force on advancing through positions for which they have little talent. Promoting the wrong people is harmful to both the organization and the individual. A career framework that supports diagonal or horizontal development, based on what each individual does best, permits an environment where everyone thrives and that takes best advantage of individual strengths.
In addition to the structural changes, the shift to agile government also requires a focused effort to rewire processes and weed out unnecessary steps that pertain to the previous strategy, and new approaches that simplify processes and speed up decision making.
3. Talent Strategy
Agile structures and processes need a talent strategy that feeds the system with an agile workforce. So an agile transformation in GCC governments probably requires a fundamentally different talent strategy that attracts, hires, incentivizes, and develops agile behaviors.
That human-centered approach to talent strategy permits government entities to leverage the abilities of prospect and incumbent employees to adapt, innovate and problem solve in highly uncertain times.
Figure 3: A proposed model of personality characteristics, agile behaviors, and business outcomes (Badal, 2020)
This model (a variant of Giessen-Amsterdam model in Rauch & Frese, 2000) provides pathways that link specific, recurring patterns of thoughts and behavior such as ideation and experimentation with desired organizational performance outcomes.
Under this approach, the public sector organization can profile talent based on characteristics that meet different agile drivers, and then compose complementing teams from multiple resources to raise performance levels, creating richer resource pools and dismantling siloes. And as a result, the public sector organization is freed to identify the thinkers, innovators, risk takers and natural entrepreneurs that it needs to activate critical missions and achieve defined outcomes.
This would also enable public organization to find the leaders who are most able to energize and motivate the different cells by developing and building on the strengths of each team members. Placing these talented leaders as internal orchestrators enables the organization to maximize the collective talent as yet untapped. And it would permit an unprecedented opportunity for role mobility across units and government departments in the GCC.
Finally, with this talent strategy, the government opens job families that could be occupied by free- moving agents sourced from within the entity, from the larger talent pool, or from outside the organization. Selecting talent with a technology-enabled system becomes an exercise in -- and a demonstration of -- agility as it permits swift matches of the right natural talents and technical skills for this role. And, as Gallup research shows, people who focus on their strengths are six times more engaged in their jobs and three times more likely to say they’re thriving in their lives. Strength-based development is both a central theme and by-product of this approach, as it makes building and nurturing talent a self-sustaining focus of the organization.
In summary, business leaders can no longer afford to continue operating as they traditionally have -- through slow-moving hierarchies and confined communication. Leaders in public sector organizations aren’t under the same pressures but their moral responsibility is far greater: to further the aspirations of citizens, transparently and faithfully. Adopting and adapting the agile practices that enable business success is the obvious next step.
To achieve similar outcomes, though, GCC public sector leaders must push to build more effective, fair, and transparent management to meet the aspiration of the people. To achieve this, governments need to rethink antiquated mindsets and processes to respond quickly to changes and societal needs.
There are eight drivers of agility; cooperation, speed of decision making, trial tolerance, empowerment, technology adoption, simplicity, knowledge sharing and Innovation focus. Moving the needle on these drivers requires change in the culture, structure, processes, and a robust talent strategy. These are difficult changes and require concentrated efforts. However, failing to change fails the duties and commitments of government -- and, ultimately, it fails to harness our full potential. We have limited time and resources to keep our countries ahead of the curve. It’s time for action.
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