When fast gets very fast: the dizzying pace of technology in the private sector and what this means for the public sector

In recent blogs I described why I think organisations are compelled to introduce new business models due to intense competition. And this competition is accelerating because of global markets and the introduction of new technology.

Contrast this with the system that is supposed to drive innovation and service improvement in public services.  Innovation in a global market does not – and cannot – rely upon a best practice circular. Yet our mindset in government and across the public sector is that this is precisely how we expect innovation and continuous improvement to be stimulated and reproduced.

We still have a distinctly top down system based on sucking in best practice to some central agency.  There it is checked, audited and inspected.  Then it is spat out over the next five years to a reluctant audience on the front line.  The manager in the local hospital or council has neither the incentive nor the inclination to accept what a ‘colleague’ down the road is doing because, as you would have heard many times, ‘it might work there but we are different’.

This mechanism is clumsy and ineffectual. Yet in the private sector, we appear to have found a different way to share best practice – we pinch it.

The intense pressure from competition forces the best companies to copy and refine whatever they can from their competitors to become best in class.  And the rate of innovation and adoption will continue to accelerate. Take, for example, the smartphone technology that gave rise to Uber (despite their recent problems in London) and how, before the world figures out how to regulate ride-sharing, self-driving cars will have made those regulations obsolete.

It is in that vein that I am increasingly struck by the dichotomy of language that describes the difference between the public and private sphere. It is not uncommon to hear the Government, when talking about the economy, to constantly emphasise the challenge to improve private sector productivity and to create a more entrepreneurial society.

Yet, when it comes to reforming the public sector, the emphasis tends to default to centralised controls.  There is unease and opposition in some quarters to flexibility and change, with insistence on preserving structures and centralised systems.  These two worlds, public and private, which you and I inhabit daily, cannot remain artificially divided forever because, contrary to popular belief, these two worlds are not made up of fundamentally different people.

Nor are the pressures on the public and private sectors completely different.

Both face the challenge of becoming more responsive and accountable to their customers or service users, their employees and wider society.  Also, if we are to remain true to concepts of the welfare state, universal provision, social justice and equity in the delivery of public services, we need to address the pressures of global markets and the challenge to representative government.

Why?  Because these pressures are calling into question the ability of traditional tools and levers – such as the way the Government exercises legitimacy, ownership and control – to respond to modern needs and pressures.

Our challenge is to construct new tools and levers that stimulates public services to find a way of promoting practitioners whose experience and reputation gives them the self-confidence to lead others to innovate. And for the system to develop a set of incentives, and the institutions a set of capacities, to continuously reinvent themselves in ways that align individual interest with the wider public realm.  I am not saying the private sector has all the answers, but it is certainly worth exchanging ideas.

If you enjoyed this, you might also enjoy another recent post inspired by the innovation demonstrated by Apple.

I future blogs I plan to dig deeper into how public services can be reformed and the role of competition and choice in public service supply chains. As always, I’d be grateful for your thoughts and comments – please get in touch.

Reinventing business models: what can the public sector learn from digital disruption of business?

In my last blog I wrote about how government is challenged by technological change and globalisation. I now want to explore what governments might learn from the experience of the private sector.

Globalisation is connected to the rise of consumerism. But its attributes of brands, choices, service, access and responsiveness are no longer the preserve of the private sphere.  Increasingly, these attributes define the expectations of the public when they interact with government or use public services.

Unless public services can adapt to these new expectations, the ability to sustain a consensus for the provision of public services free at the point of use may prove impossible in the long term.

Business, of course, has been at the forefront of shaping this ‘new world’. But those forces equally challenge us.

How, for example, does business reform its governance in a way that inspires the trust and confidence of investors and is accountable to employees and the wider public?  How should businesses respond to the opportunities of the global market and new technology, both of which are producing a revolution in the way the business operates?

Let me give you just one example of how these global pressures are influencing business today.

Thirty years ago, businesses could almost entirely rely upon product cycles that lasted for three to five years and business models that could last a decade.  The great companies of the last century created products and refined their supply chains over decades. And they based their business models on relatively stable markets, high barriers to entry and a plentiful supply of relatively unskilled labour.

However many of the most successful companies today are those that have developed a capacity to reinvent themselves – not just once every ten years – but now every eighteen months or two years.

Businesses operate in a global competitive market.  They are challenged to create new value, improve productivity and respond to tomorrow’s customer needs – today.  That global competitive market ensures that today’s businesses simply cannot afford to wait five to ten years to develop a new product cycle or business model. For those companies and communities that are equal to the challenge, this relentless competitive pressure is creating new sources of wealth has increased standards of living.

Next week, I’ll be talking in more detail about innovation and why businesses might have an advantage over the public sector. In the meantime, if you enjoyed this post, I’d be very grateful if you’d help it spread by emailing it to a friend, or sharing it on Twitter or Facebook.  And if you are interested in public sector innovation you might be interested in another of my recent blogs where I wrote about how businesses learn from mistakes.

The world is still flat: how economic change is straining our ability to remake public services

I want to talk to you about what is arguably the greatest domestic policy challenge facing governments over the next decade.

How to create the conditions for a sustained transformation in our public services in a way consistent with the fundamental values that underpinned their creation.

In this first in a series of blogs, I want to anchor the debate about public service reform in the context of a number of global pressures affecting governments.

Every government is challenged by a similar set of pressures. The most significant of these is when a combination of rapid technological change leads to profound transformation of the economy. This has significantly increased prosperity. But governments are struggling to maintain a consensus of support, particularly as communities experience periods of insecurity and upheaval when technology is introduced.

The change unleashed is provoking tough and searching questions for governments of all political persuasions.

How do we reconcile rising flows of goods, services, capital and labour mobility with the need to create and sustain socially cohesive communities?

At the same time the capacity and capability of health, education, social care, housing and other public services to respond to change is curtailed by continuing austerity. And our ability to build cohesive communities is even more difficult when the very mechanism for reconciling competing tensions within communities – the institution of government and the process of democracy – has never been more questioned.

People’s sense of ‘connectedness’ with government and the political process looks increasingly weak and shattered.

Next week, I’ll post about how business has responded to the challenge of technological change. The most successful businesses are agile – attempting to reinvent their their business model to meet rapidly evolving customer needs.

Meanwhile if you enjoyed this you might also enjoy my summary of our government digital trends survey. We asked civil servants how their work is influenced by new digital ways of working and the benefits for the public

Finding 10,000 ways that don’t work: what government can learn from business

Failure is not something to be embarrassed about. As Thomas Edison said about his many attempts at creating a lightbulb, “I have not failed. I’ve just found 10,000 ways that don’t work”. Then, of course, he found a way that did work and that is all anyone remembers.

Our government today is too often paralysed by fear. Taking risks is viewed as reckless because civil servants are afraid of getting criticised should a project stumble. Nobody wants to face the fury of the Public Accounts Committee.

But among entrepreneurs, failure is more like a badge of honour. It is proof that you were not afraid to push your limits. In fact, some tech companies will not hire people if they are unable to point to at least one great failure. Steve Jobs is the most remarkable example of this phenomena. He co-founds Apple Computer when he is 21, and by the time he is 23 he’s a millionaire. He becomes legendary. And then, at 30, it all comes crashing down.

We need more of this entrepreneurial mind-set in government. And we need public sector leaders to create the conditions for it to flourish. If somebody starts a company and fails then they start another company. If that person is smart and humble they learn the lessons. Jobs wanted to prove his early success at Apple was not a fluke. He launched a new computer company, NeXT, and also Pixar Animation Studios. I love Pixar movies!

In 1996, a struggling Apple acquired NeXT, returning Jobs to the company he helped to create. And the following year Jobs became Apple’s CEO, driving the company to its greatest successes, from the iPod to the iMac to the iPhone to the iPad.

It is too commonplace to blame the blunders of government on civil servants and other public servants. Yet the way our public services are currently structured means success is rarely defined as achieving results. Instead it is about keeping your head down, putting in the hours, and not breaking the rules. Process dominates and outcome is secondary.

In business, of course, the outcomes always has to be first. Because if you do not make enough money then your business dies. Anyone who has run a small business knows the feeling of having to innovate to survive. In those moments people come up with some of their best ideas.

I am not suggesting that government should be run like a business. Or that all politicians should act like entrepreneurs. However, we do need to take some of the elements of the best of business – being agile, networked, innovative and willing to take calculated risks. And making mistakes. And incorporate them into government. Given how fast the world is changing it is the only way government can keep up.

Nobody put this better than Steve Jobs in his speech to Stanford graduates in 2005 (two years before he launched the iPhone).

“I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter into one of the most creative periods of my life.”

What do you think? Leave a reply below or contact me by email.

STEAM not just STEM: how can we encourage more creativity?

Creative ideas take time. They are often generated after an initial period of thinking deeply about the problem, considering different ways to frame the problem, and exploring different possible solutions. Sir James Dyson developed over 5,000 prototypes before he patented his vacuum cleaner. And Walt Disney animated cartoons for nearly two decades before his first big success, Snow White and the Seven Dwarves.

So how can we encourage more creativity? How can we help people, as Apple famously put it in 1997, to ‘think different’? One way is to go back and start at the beginning. With children in school. And by rewiring our educational system to focus on STEAM rather than STEM.

In recent years, as the United Kingdom has faced stiff economic and technological competition from China and other countries, there has been a surge of interest in science, technology, engineering and mathematics. It is clear that if we are to maintain our position as a global leader in innovation, we have to increase the emphasis on these four subjects in our schools.

Yet this is an area where we have lagged behind relative to other countries. We need to up our game dramatically. The UK ranks 16th out of 20 OECD countries for the proportion of people with technical qualifications. We have particular skills shortages in sectors of the economy that depend on STEM subjects. Nearly 40% of employers report difficulties recruiting staff with relevant STEM skills.

But STEM alone will not do it. We need to add an A for arts. Focusing only on the sciences is not enough to stretch the mind and encourage creativity.

Take a look at some of the most successful and innovative products produced in the last ten years. The iPhone is not simply a technological tool. It is a piece of art and a fantastic work of creative design. And the applications are more than mere products of programming. The best are feats of imagination.

The STEAM movement is already being championed in the United States, spearheaded by academics and students at the Rhode Island School of Design (RISD). They argue that the US educational system (and, I think, the UK) is still functioning in the same way it did a hundred years ago. It has the same outdated systems, institutions and traditions.

We are trying to educate eight million children via an antiquated school system. Or as the academics at the RISD put it,

“Schools were, and still are, structured like the factories they were developed to serve. They treat education like an assembly line – you move from one task (class) to the next – day in and day out. There is little collaboration or interchange.”

The danger is that innovation will continue to wane. To become a more innovative economy requires the ability to seize new opportunities and adapt to change. But historically, the UK has not been as successful at commercialisation and development as we have been at basic research. We have often been slower than competitors to take up and deploy existing technologies.

Our education system tends to reward test scores and rote memorisation rather than creativity and problem solving. Our students are learning antiquated skills in a modern, and changing world. And that will be a recipe for disaster as the world continues to move towards greater connectivity, innovation and technological change.

Or, as the US secretary of education Richard Riley famously summed it up, “The jobs in the greatest demand in the future don’t yet exist and will require workers to use technologies that have not yet been invented to solve problems that we don’t yet even know are problems.”

What do you think? Leave a reply below or contact me by email.

Digital in Government: the next step is true transformation

Have you recently tried to access a government service and wondered why it can’t be as simple and easy as Amazon? Were you frustrated, like me, when required to print, complete and return a physical form rather than fill in a pre-populated online one?

In our recent survey of civil servants we wanted to understand how digital – the powerful combination of disruptive technologies underpinned by new business models – was being adopted across government. How is government seeking to enhance digital customer experience by optimising its digital infrastructure and insight from analytics?

Transformation = Restructure

Our Government Digital Trends Survey of nearly 4,500 civil servants over three years found they have a consistent understanding of what digital means. The most popular definitions chosen were ‘restructuring services’ followed by ‘improving online services’.

With government facing pressures from multiple directions, not least the challenge of implementing a successful exit from the European Union, civil servants view digital transformation as a win-win. Not only can it improve the quality of service that citizens receive, through the development of more convenient delivery models, but these same models can help government to reduce their costs.

But the sheer scale of changes facing the government means that the civil service needs to think harder about the way it works.

Breaking down ‘stove-pipe’ government

Adding to the skills gap I described in my previous blog, there are in-built structural challenges across government. Public services tend to adhere to ‘stove-piped’ models that have largely been left untouched for decades.

Departmental structures encourage civil servants to focus purely on their own priorities. The organisation of government provides little opportunity to consider how citizens’ needs cut across departmental boundaries.

The good news is that civil servants view the collection of data that underpins their operations as a core process. In 2017, civil servants told us that the most significant benefits of ‘big data’ were reducing expenditure (29%) and improving operational efficiency (21%). But opportunities for innovation in new processes (7%) and improving customer engagement (3%) trailed far behind.

Data-enabled government is needed

This example highlights the challenge and opportunity of digital transformation in government. A more innovative approach, such as a single interface for collecting data, is not only a source of efficiency. It allows government to remove the duplication of effort and provides a catalyst for the development of end-to-end processes that place the needs of citizens at the centre.

As government is understandably cautious by nature, digital transformation was initially limited to narrow front-end activities. The focus was on creating digital channels to ‘bolt on’ existing business processes, rather than redesigning processes endto end.

Yet government benefits from being one of the most ‘data-rich’ organisations. The growing number of data sets that are now generated, through the automation of processes, create huge opportunities to drive digital transformation. The Policy Exchange think tank suggested that the UK government could save up to £33 billion through improved data use.

What does data enabled digital government look like?

I think there is an urgent need for the joining and sharing of data across government to help civil and other public servants to plan more effective services targeted at those most in need.

There are several aspects to this data enabled digital government, including:

  1. Predictive analytics: Human resources tend to represent the largest single source of costs for government. Predictive analytics can maximise the efficiency of operations and improve workforce utilisation (helping government do more with – more often than not – less).
  2. Coordinated government analytics: Sharing data across government organisations drives benefits by avoiding the duplication of effort. But going beyond efficiency, the creation of cloud-based big data hubs leads to more personalised and targeted services.

And tailored and preventative approaches are urgently needed to address high cost social issues such as troubled families and health problems such as obesity. Predictive and coordinated analytics lend themselves to addressing these so called ‘wicked issues’ because they are so complex, fast moving and they involve changing the behaviour or gaining the commitment of individual citizens.

If you would like more information about the Government Digital Trends Survey, or would just like to raise a question, please feel free to add a comment below or contact me by email.

Government needs to invest and build digital skills across government – the view of civil servants

Having the right skills and capacities to hand is pivotal to the effective digital transformation of government. For the past three years, we have asked civil servants to tell us how government is adapting to changing digital skills needs as part of our Government Digital Trends Survey.

The most startling finding from this year’s survey is a rise in the number of civil servants who say that a lack of training is a barrier to digital transformation

Lack of available skills continues to be a barrier to transformation

In 2017, 62% of civil servants placed lack of training for staff among the top three barriers to digital transformation of government. Despite a significant increase in training over the last twelve months, 43% of respondents told us that they had not received enough digital training to do their job well (an increase of 6% points since 2015). When asked about whether they personally receive adequate digital skills training to do their job, the number agreeing was just 12% (a decrease from 20% since 2016).

Seeking to fill this digital skills gap, we found that civil servants are taking a proactive approach to skills acquisition:

36% are using self-directed study in their own time to develop their digital skills (an increase of 12% points since 2015)

Civil servants are calling out a lack of specialist digital skills

Several types of skills are needed: technical and professional skills, including ICT specialist skills for workers who drive innovation and support digital infrastructures and the functioning of the digital services. This year we asked civil servants, including those working in digital programmes, to identify the top three digital skills gaps in their organisation.

Development and service design were the most popular answers, chosen by 44% of respondents. The next most common answers were agile delivery management (37%), user research and technical architecture (36% each).

To seize the benefits of digital, government needs these in-demand specialists: workers who can code, develop applications, manage networks and analyse data, among other skills. These skills enable innovation to flourish, often in collaboration with the private and not-for-profit sectors, but also support the infrastructure that government and users rely on.

What are the priority skills policies to meet these challenges?

Addressing the challenges of digital will require an overhaul of government’s skills policies. It must ensure that an increasingly digital world yields better quality jobs and that civil servants have the means to take advantage of the new job opportunities that open up.

In my opinion there are five priorities for skill policies to facilitate take-up of these opportunities:

  1. Part of the task is to ensure that all civil servants have basic ICT skills as well as solid problem-solving skills to use ICT effectively. Many of these skills are also acquired outside education and training institutions – for instance, and as we have found through the survey, in the workplace. Government could support and better recognise skills acquired by civil servants outside formal channels.
  2. It is not just sufficient for civil servants to have skills – government must fully use these skills to reap their benefits in terms of higher productivity. The use of digital skills, including problem solving in a technologically rich environment, varies substantially across the civil service. A key factor driving this variation is the use of high performance work practices such as teamwork, work autonomy, training, flexible work hours, etc.
  3. For ICT specialist skills, basic programming is no longer enough. For instance, advanced engineering and experience with machine-learning are increasingly important. In addition, ICT specialists also need domain-specific knowledge, given the potential applications of ICT in the business of government, such as health, education and welfare.
  4. Government needs to better assess and anticipate changing skills needs in order to adapt programmes and pathways offered and guide civil servants towards choices that lead to better outcomes. By including all stakeholders in skills assessment exercises government can ensure that the information collected is useful and that policies respond to actual needs. This includes working closely with industry to address shortages in areas of strategic importance.
  5. As skills demands change continuously, training for civil service to keep up with new skills requirements is crucial. This requires offering better incentives for civil servants to re-skill and up-skill. And includes, for example, the government fully supporting and embracing the Digital Academy initiative in the Government Digital Service (GDS).

If you would like more information about our Government Digital Trends Survey, or would just like to raise a question or add information, please feel free to add a comment below or contact me by email.