Article

Public sector transformation

Five lessons from the private sector

An analysis of private sector global companies, including high-tech start-ups, manufacturers, banks, retailers and insurance firms, reveals five valuable lessons for the public sector.

Overview

As the focus continues on public sector transformation it is imperative to look beyond the buzzwords. Our five key lessons from the private sector all apply equally within the public sector, and allow us to identify the actions needed from the main players in transformation programmes.

The five lessons

Our five key lessons from the private sector all apply equally within the public sector, and allow us to identify the actions needed from the main players in transformation programmes:

  1.  Define transformation widely but definitively for your organisation
  2. Recognise that transformation brings greater complexity and demands on leaders
  3. Leaders need to be a personal journey. They must learn how to lead without authority, and how to blend traditional management disciplines with experimentation and motivation
  4. Manage the programme tightly, with well-designed phases and absolute clarity of accountability and decision rights
  5. Use digital across the organisation as a transforming element to drive improved customer outcomes.

Challenges

The three key themes capable of holding back the transformation of private sector firms may also prove challenging for public bodies.

  1. More leadership – not more leaders. 
  2. Clarity and decisiveness – in phasing, governance and decision-making. 
  3. Respond to the digital challenge across the organisation – not just in IT.

Transformation actions

From the experiences of the private sector and from the public sector’s own successes, we can now identify actions for the key players involved in transformation programmes.

  • For chief executives/permanent secretaries:
    Setting overall direction by articulating the outcomes of transformation, shaping the target design of the future organisation within which individual projects deliver, and testing the phasing of transformation for coherence and realism.
  • For transformation directors:
    Learning from others by building peer groups, testing solutions and phasing of change.
    Recognising the need and interaction of both programmatic and adaptive skill-sets.
    Investing in different planning options, allowing scope for the plan meeting reality, measuring what matters.
  • For the enabling environment:
    1. IT directors should move to less rigid and more interoperable platforms, embrace multi-disciplinary teams, and shake off slow-moving suppliers
    2. Finance directors should devise appropriate governance and accountability arrangements and provide realistic flexibility in funding cycles
    3. HR directors should invest in learning and force leaders to address workforce planning
    4. The centre of government should understand the requirements of transformation and tailor assurance to encourage success rather than compliance.
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