Public sector

I originally published this in early September when I was still technically working at GDS. At the time I was asked to edit it as it was thought that it was “too political”. Rather than edit, I withdrew it. I’m no longer there, so thought it worth republishing…

I’m just coming to the end of a year-long assignment working within the Government Digital Service looking at how cloud-based collaboration services could help improve the operation of the civil service.

I’ve worked in parts of the public sector in the past – eight years spent at the BBC, alongside consulting work in a handful of government agencies and local authorities. The past 12 months, though, has given me exposure to the workings of Whitehall, and it has been a privilege to get an effective crash course in Government in that time.

There are a lot of preconceptions held about the efficiency and effectiveness of the public sector. It’s also a particularly Big P political issue as it seems fairly obvious that the new government doesn’t really approve of it at quite a deep-seated ideological level. I’ve never been so clear cut in seeing public=bad, private=good, and the experience of the past year has left me with a few high-level observations.

Five Long Years
There’s a lot of debate at the moment in business circles about the applicability of performance management processes in modern businesses. One common theme is that a year as a period for assessing performance and demanding accountability is a bit of a long time these days. If a year is a long time, five years is an epoch. And yet our political system basically operates with a performance management cycle of that length. That’s enough time for vast swathes of an economy to be well and truly Uberized.

Politicians in government are given far too long without being properly called to account to head up a modern organisation. It makes for odd management (to put it politely). I’ve no idea what the answer is, but a few things spring to mind:

The traditional Political Science answer I guess would be for the UK (unwritten) constitution to have better separation between the Executive (the people coming up with political direction) and the Legislature (the body that actually passes laws). In our political system these two things are munged together in a precarious way – we ostensibly vote for a local candidate but effectively are voting for a party to govern. In more formally-constructed democracies like the USA, the Executive (the President and his or her people) are separated from the Legislature (The Senate and House of Representatives) – although the net result too often appears to be a series of long stand-offs when different parties have control over the two sides of government.

This sort of level of constitutional reform in the UK seems unlikely: we couldn’t even get our heads around changing the electoral system when offered the chance a few years ago.

The tech libertarian answer is increasing use of technology to put the day-to-day decision making of everything in the hands of the people. Maybe I’m a reactionary old git, but this strikes me as a terrible idea: democracy would turn into a pale imitation of Buzzfeed, and the most pressing political issues would be about kittens. Running something complicated like a country needs more than a half-eye on the latest poll on offer on Facebook.

The only other option I can think of is benevolent dictatorship, but that seems strangely to be seen as unacceptable…

So, for the meantime, politicians continue to call the shots in a weirdly accountable/unaccountable way, and that randomisation sitting at the top of the management chain of the public sector certainly makes it different (although not necessarily as much as one might think) from the private sector.

Risk aversion
Another factor that does appear to lead to different behaviours in the public rather than private sector is the approach to taking risks. What I have come to term as the “Losing your job on the front page of the Daily Mail factor”.

Risk-taking, in a calculated manner, is a large portion of what organisational management and leadership is about. Spotting things that can be done differently that are likely to have a positive impact. A decision to make a change should be seen in the context of the upsides of positive outcome, and then mitigating or having contingency against possible downsides.

In the Private Sector, upside is most commonly thought of as positive impact on the bottom line, increasing profit by increasing revenue and/or decreasing cost. It’s not the only story, but it underpins much of the decisions made in business.

In the Public Sector, things are slightly different: there is (generally) no profit – bottom line is all about cost management. My gut sense is that it is easier to motivate people around a positive outcome (more profit) than a negative one (less cost). That’s nothing to do with economics, and everything to do with psychology.

But whilst it is often harder therefore to articulate and motivate around the upside of taking risks in the public sector, the downsides of risks loom large. The public sector, by its nature, is subject to far more scrutiny than the private. When things go wrong, they make the papers. People are blamed. Jobs are lost. Careers are destroyed. Very publicly. Often on the front of the Daily Mail. And this in the context of where the rewards for being a leader in the public sector are often much reduced to their equivalent in the Private (for example, Sir Jeremy Heywood, Head of the Civil Service, earns somewhat shy of what is still a very healthy £200,000; Sir Martin Sorrell, who runs a few ad agencies and dresses as a Bond villain, somewhere nearer to £40,000,000).

In all of that context, it would be expected because of the personal risk/reward economics at play, that decision-making in the public sector will be, to put it bluntly, risk-averse.

The problem is big
The Civil Service is a big beast. Excluding organisations like the NHS, maybe 400,000 people working in hundreds of different agencies and departments. The bigger departments (like the Home Office) employ tens of thousands – but even the smaller ones like the Department for Business, Innovation and Skills, or the Department for Culture, Media and Sport have thousands of employees working in their network of arms-length bodies. Factor in the health service, local authorities and the rest, and the public sector makes up a huge proportion of UK employment.

In a world where we are increasingly running businesses where value lies in the interactions between people rather than transactions between inanimate objects, I’m coming to the conclusion that traditional models of organisation, and particularly the concept that scaling bigger gives economy and efficiency, are broken. The problems that bedevil big public sector organisations are the same that bedevil any big organisation: big makes you slow, lumbering, bureaucratic. And for big organisations, that’s probably in many ways a good thing: if only our banks had been a bit more slow, lumbering and bureaucratic in their trading operations, then the world might not be in the current period of meh in which we find ourselves.

The sticking point is that our expectations as consumers, as digital citizens, are changing rapidly. We expect to be able to deal with organisations in very different ways these days, and that pace of change outstrips the ability for many big organisations to respond. These challenges are universal to big organisations.

Whilst on holiday in Italy in the past few weeks, amongst other wonderful experiences I managed to pick up my very first Italian parking ticket, issued by the commune of Griante. Griante is a local authority of six square kilometres, nestled on the eastern shore of Lake Como, with a population of only 600 people. The parking ticket system was archaic (scrappy bits of paper), but a small organisation like Griante can exist more effectively today than ever before. Paying the thing was simply a matter of going into the nearest Post Office.

In the UK, especially in the Local Authority-level public sector we seem to be going the other way. Local authorities are increasingly combining back- (and now sometimes front-) offices services to create massive organisations. This reaction to the pressures of austerity seems to be, to my simple mind, headed in the wrong direction. Big doesn’t scale like it used to.

…

There are undoubtedly eccentricities in the public sector, but that’s true of any industry segment, or, indeed, organisation. There are things that are better served in the private rather than public sectors, but I struggle to think of hard and fast rules as to where those boundaries lie. Anyone who thinks that, by default, the private sector is more efficient and effective than the public quite frankly obviously has never spent time working in both.

Postscript (October)

There’s a fourth challenge, as evidenced by the request for this to be edited when first published. That the Civil Service is unable to conduct its business truly in the open because of the risk of being seen to have political bias. Everything in the Civil Service has some sort of political implication, and if you can’t work openly it’s very difficult to work, in my opinion. I have no idea how that might be resolved.