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Seven characteristics of public sector productivity

Ministers have been adamant that public sector productivity needs to improve since official figures suggested it flatlined throughout the last decade. The amount of activity the public sector delivered, according to Office for National Statistics data, seemed inextricably bound to the amount of funding it received. Now the Government plans to boost its own productivity with a series of initiatives to be published alongside the Spending Review next month.

Productivity is a complex and often contentious issue for the public sector. In many government settings, outcomes matter more than outputs. The competition that drives persistent productivity gains in business is often absent. And complex public services that support people through multiple agencies are difficult to measure. As a result, our research suggests that productivity can feel abstract to public sector managers and leaders.

To help inform productivity drives across the public sector, Deloitte has studied high-performing government organisations around the world to identify common themes and behaviours. The results were published today in our annual State of the State report, available here.

Our analysis points to seven characteristics of highly productive public sector organisations. They are:

1. Talented people with a licence to deliver

Highly productive organisations attract talented people because they offer a salary that corresponds with the market rate for their skills and experience. Those rewards are enhanced by an engaging culture, flexible working choices and the opportunity to make a difference.

People in productive organisations enjoy a high performance culture, underpinned by authentic performance management. An active approach to talent management means that the organisation pre-empts the skills it needs to make sure that the right people are in the right posts when needed.

Talented people in highly productive organisations are given a licence to deliver because they are deployed according to their skills. The organisation makes best use of their talent and maximises their working time by deploying them across multiple responsibilities.

2. No repetition, hesitation or deviation

Productive organisations have designed repetition out of their processes. Those that deal with the public make sure transactions are right first time to avoid unnecessary duplication of effort.

Hesitation is reduced in productive organisations because managers have enough autonomy to make decisions. While decision-makers recognise risks, they know they have the permission and authority to make a call.

Highly productive organisations are focused on the core of their mission – the public value that they create – and do not get sidetracked. So just like in the classic Radio 4 game, ‘repetition, hesitation or deviation’ are rarely found in the most productive public sector organisations.

3. Citizen-centric forces shape services and attract resources

The best public sector organisations put the individual citizen at the centre of their thinking. That means services are designed around the user experience and developed with their input.

Continued and transparent citizen interaction keeps the organisation connected to their needs. By understanding what the customer wants, productive organisations do not waste resources on initiatives that do not add value. They are active in seeking continuous, constructive feedback and they act on it.

The force of ‘citizen-centricity’ does not stop at agency boundaries. It pulls public sector teams and resources together from different organisations to work around service users in ways that generate cross-sector productivity gains.

4. Insight informs deployment and demand management

Highly productive organisations understand their environment and act on that insight. For public bodies, that means a working knowledge of where demand comes from for their services, the factors that affect it and how their resources are deployed to meet it. The principle applies as much to public service delivery organisations as it does to administrative teams with internal clients.

If an organisation understands how demands on its services operate, it can maximise its productivity in two ways. First, it can align its resources to demand. Frontline staff, for example, can be deployed when and where they are needed the most. Second, the organisation can shape citizen demand through preventative measures including behaviour change.

5. Technology helps people work smarter and cheaper

Public sector organisations can suffer from under-investment in IT. But technology is key to more productive working practices – whether the employee is in an office or in the field.

Highly productive organisations deploy technology that helps employees maximise their time. For office staff, that could mean better software, tools to help them collaborate with colleagues or new hardware that simply works faster. For field workers, mobile technology reduces their latent time and the need to return to an office.

Technology is also exploited to good effect in interactions with citizens. Many people in the UK have become accustomed to personalised, online self-service and are open to that kind of interaction with the public sector too.

6. Form follows function

UK public sector organisations have evolved over decades – even centuries – and sometimes in ways that have weighed down their productivity. Overlapping and duplication have often been introduced into the system. Opportunities for joined-up working have been missed as organisations grew in silos.

Highly productive organisations have been redesigned for today’s needs. Where appropriate, back-office functions have been shared. Management has been delayered. In some cases, organisations have merged. While these activities have become commonplace across the UK public sector, considerable opportunities still exist.

New business models provide public sector leaders with varied options to recast their organisations. But whether internal change or more profound transformation is the most effective option, highly productive organisations tend to be structured around the principle that ‘form follows function’.

7. The journey never ends

Debates around public sector reform can inadvertently perpetuate a myth: that change requires a brief period of activity to reach an end-point at which its reform is permanently complete. But society, people and technology never stop changing. At the same time, every government will seek to shape the public sector in line with its agenda through a reform programme.

For these reasons, the pursuit of better productivity needs to be a continuous process rather than a one-off project. The most high-performing organisations never stop seeking efficiencies and new ways of working. In the private sector, competition drives that persistent search. For the public sector, a continual productivity journey is best achieved by fostering a culture of innovation and never-ending dialogue with service users.

These seven characteristics may not be applicable to every public sector setting, but are intended as guides to inform discussion. Thinking in terms of productivity can help organisations maximise their impact – and with spending cuts continuing throughout this UK Parliament, pressure on the public sector to do more with less will be greater than ever.

More thinking on public sector productivity is available in The State of the State 2015-16.

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